The Indian gem and jewellery export sector is adapting to a new United States tariff structure, specifically the Section 301 regime, which became effective on July 24, 2026. This framework maintains a 10% additional tariff on Indian gem and jewellery products, transitioning from a previous surcharge. The change follows an inquiry by the Office of the United States Trade Representative (USTR) concerning forced labor practices in various economies.

While the continued 10% tariff presents ongoing obstacles for Indian exporters, India has secured a more favorable position compared to several rivals. By implementing a prohibition on imports produced with forced labor, India now benefits from a 2.5 percentage-point tariff advantage over countries such as China, Hong Kong, Thailand, Turkey, the UAE, Israel, and Vietnam, all of which are subject to a 12.5% additional tariff. Shri Kirit Bhansali, Chairman of the GJEPC, firmly refuted any connections between India's gem and jewellery industry and forced labor, citing numerous studies that underscore the sector's dedication to ethical sourcing, employee well-being, and responsible business practices. He also commended the Indian government's recent amendment to the Foreign Trade Policy, which forbids the import of goods made with forced labor, reinforcing India’s commitment to human rights and aligning its trade policies with global labor standards.

Despite this relative advantage, the 10% U.S. tariff is still seen as a hurdle, especially since key diamond trading centers in Europe continue to enjoy duty-free access for natural diamonds. This creates a significant competitive disparity for Indian exporters. Furthermore, jewellery exports will continue to face the existing U.S. Most Favored Nation (MFN) duty of 5.5%–6%, combined with the additional 10% Section 301 tariff, bringing the total effective import duty to approximately 15.5%–16%. Lab-grown diamonds and synthetic stones are also subject to this 10% additional tariff. The GJEPC is actively pursuing an early India–U.S. Bilateral Trade Agreement (BTA) to bridge this tariff gap and boost the competitiveness of India's gem and jewellery exports in the U.S. market, advocating for natural diamonds and colored gemstones to be exempt from the additional tariff.

The global trade landscape constantly shifts, and nations must adapt to new regulations while upholding ethical standards. India's proactive stance on banning forced labor demonstrates a commitment to human rights and sets a positive example. By continuing to engage in constructive dialogue and seeking bilateral agreements, India can overcome current trade challenges, foster fair competition, and ensure the continued growth and integrity of its gem and jewellery industry on the world stage.