After year of turmoil, Indian diamonds and gems set to shine in US markets

Trade Deal Ushers in New Hope for Indian Exporters

The Indian gems and jewellery sector, reeling from a brutal year of high US tariffs, is breathing a sigh of relief following a landmark interim trade agreement between India and the United States. Exports of cut and polished diamonds to the US, India's largest market, plummeted by over 60 percent last year, dropping from $3.64 billion to just $1.45 billion. Overall gem and jewellery shipments to America fell 44 percent between April and December 2025, leaving manufacturers and small businesses in distress. The new framework slashes duties on unset diamonds, coloured gemstones, and natural pearls to zero, while reducing tariffs on finished jewellery to 18 percent from a punishing 50 percent. This move is seen as a critical turning point, restoring competitiveness and injecting fresh optimism into an industry that polishes nine out of every ten diamonds worldwide.

Industry leaders have hailed the agreement as a game-changer, particularly for the thousands of small and medium enterprises that form the backbone of Surat's diamond hub. The tariff relief comes at a pivotal moment, as geopolitical tensions and fluctuating gold prices have pushed consumers toward diamonds as an alternative. With US importers no longer in wait-and-watch mode, orders are expected to rebound sharply, stabilizing operations and safeguarding jobs across the supply chain.

Industry Voices Praise the Tariff Rollback

"We are elated by the Interim Agreement framework announcing zero-duty access for diamonds and coloured gemstones to the US, especially after a difficult year in which India's cut and polished diamond exports to our largest market fell by over 60 per cent. This is a big breakthrough and will lead to more jobs," said Kirit Bhansali, chairman of the Gem and Jewellery Export Promotion Council.

Other executives echoed this sentiment, noting that the deal not only eases pricing pressures on polished diamonds but also positions Indian craftsmanship for greater global appeal. De Beers Group's Forevermark CEO highlighted the buoyancy returning to the market, predicting 12 percent growth for India's natural diamond jewellery sector in 2026. As gold prices swing amid uncertainties, diamonds stand to gain as a more stable investment and fashion choice. The industry is pushing for further exemptions, including lab-grown and synthetic gemstones, to broaden the benefits.

For SMEs, which struggled under the tariff burden, this opens doors to unprecedented US market entry, improving margins and ensuring artisans' work reaches international buyers at fair prices. The agreement aligns with long-term goals to ramp up exports to $15 billion by 2030, fostering deeper supply-chain ties between the two nations.

Looking Ahead to a Brighter 2026

India's dominance in diamond processing, coupled with rising demand for both natural and lab-grown stones among younger US consumers, sets the stage for robust recovery. While jewellery still faces 18 percent duties, the zero-tariff on raw materials like rough diamonds—advocated to match gold's treatment—could further fuel growth. Experts anticipate stabilized prices and renewed investments in manufacturing, technology, and design. The deal's success hinges on swift implementation, but early signs point to revived confidence and job creation.

As the sector moves beyond bridal wear into everyday and self-purchase categories, penetration in domestic and US markets is poised to rise. With low current diamond usage in Indian jewellery at 12-14 percent versus 70 percent in the US, vast opportunities lie ahead. This trade framework not only reverses recent losses but signals a balanced, mutually beneficial partnership.

In summary, the US-India trade deal marks a pivotal shift for the gems and jewellery industry, slashing tariffs to revive exports, boost jobs, and restore India's sparkle in American markets after a year of turmoil. Growth projections for 2026 underscore the potential for sustained prosperity.