The recent US–India trade reset, which brings tariffs on Indian gems and jewellery exports down from 50 per cent to 18 per cent, could mark a decisive turning point for one of India’s most export-dependent sectors.

For months, elevated tariffs had strained order cycles, compressed margins, and disrupted shipment planning, especially in the United States, India’s largest overseas market for jewellery. The rollback now signals not just relief, but a potential competitiveness reset.

While the broader trade recalibration spans multiple sectors, the implications for gems and jewellery are particularly immediate. The US remains one of the largest destinations for India’s jewellery exports, accounting for a significant share of outbound shipments across polished diamonds, gold jewellery and the rapidly expanding lab-grown diamond (LGD) segment. In a sector where margins are thin and timelines are tied to seasonal retail demand, tariff volatility can quickly ripple across the value chain.

In recent months, exporters were forced to either absorb higher duties, eroding profitability, or pass them on, risking price competitiveness at the American retail counter. Buying cycles slowed, forward contracts became harder to structure, and inventory planning ahead of peak US festive seasons grew uncertain. 

The tariff reduction restores a measure of stability that exporters rely on to lock in orders months in advance.

“The tariff correction was much-awaited and will bring in a renewed momentum in India’s gems and jewellery trade,” said Pooja Madhavan, MD and Founder at Limelight Lab Grown Diamonds, adding, “US has always been one of the largest export markets for the sector and this will bring back the enthusiasm, boost competitiveness, accelerate lab grown diamond adoption and strengthen India’s position as the world’s most trusted jewellery manufacturing hub.”

Her assessment reflects a wider industry view: the shift is not simply about lower costs, but about restoring export confidence at a time when global sourcing patterns are being reshaped by geopolitical and trade realignments.

Lab-Grown Diamond Inflection Point

The reset may prove especially consequential for the lab-grown diamond ecosystem. India has emerged as a dominant producer of lab-grown diamonds, with manufacturing clusters such as Surat driving scale and efficiency. Meanwhile, the US has become the largest global jewellery consumption market and a leading retail destination for lab-grown stones, particularly among younger consumers drawn to affordability and sustainability.

Unlike natural diamonds, LGDs typically operate on tighter spreads. Even modest tariff escalations can alter retail pricing bands and dampen demand. The earlier 50 per cent duty therefore weighed disproportionately on this segment, where price positioning is central to growth.

Namita Kothari, Founder of Akoirah by Augmont, noted that elevated tariffs had disrupted buying cycles and compressed margins for exporters who were forced to absorb costs or risk losing competitiveness. A lower and more stable tariff environment, she said, restores predictability for forward contracts, inventory planning and shipment timelines that are closely aligned with seasonal demand in the US market.

She added that the correction is particularly timely given that the US remains the largest jewellery market globally, where laboratory-grown diamonds are steadily gaining market share. Improved tariff economics could support shipment momentum and provide relief to manufacturers operating on thin spreads, while enabling Indian brands to pursue deeper retail partnerships and sharper assortment strategies.

Beyond Short-Term Relief

The broader significance of the trade reset lies in its downstream impact. India’s gems and jewellery sector is among the country’s largest employment generators, supporting extensive MSME networks across cutting, polishing and manufacturing hubs. Stability in its primary export market influences working capital cycles, production schedules and hiring decisions.

At a strategic level, the recalibration strengthens India’s position as a preferred global manufacturing base, as international buyers diversify sourcing beyond single geographies. For emerging Indian brands, particularly in the lab-grown space, greater tariff clarity may accelerate ambitions to move beyond backend supply roles and build direct international presence.

As order books adjust in the coming quarters, much will depend on how quickly US retailers recalibrate sourcing strategies. With seasonal demand cycles approaching and export pricing back on firmer ground, the industry now has clearer visibility.