The Gem & Jewellery Export Promotion Council (GJEPC) has responded to the United States’ transition from the temporary Section 122 balance-of-payments surcharge to the new Section 301 tariff regime, which came into effect on 24 July 2026. Under the revised framework, the additional tariff on Indian gem and jewellery exports remains at 10%.
The updated tariff policy follows investigations by the Office of the United States Trade Representative (USTR) into the implementation and enforcement of restrictions on imports linked to forced labour across 60 economies.
Although the continuation of the 10% tariff continues to pose challenges for Indian exporters, India has been placed in the lower tariff category after introducing measures that prohibit the import of goods produced using forced labour. This gives Indian exporters a 2.5 percentage-point tariff advantage over several competing manufacturing and trading hubs, including China, Hong Kong, Thailand, Türkiye, the UAE, Israel and Vietnam, which are now subject to a 12.5% additional tariff.
Commenting on the development, Shri Kirit Bhansali, Chairman, GJEPC, said, “We strongly reject any suggestion that India’s gem and jewellery industry is associated with forced labour. Multiple independent studies have demonstrated the sector’s long-standing commitment to responsible sourcing, worker welfare and ethical business practices. We also welcome the Government of India’s amendment to the Foreign Trade Policy prohibiting imports produced wholly or partly through forced labour, reinforcing India’s commitment to internationally recognised labour standards.
“However, the continuation of the 10% U.S. tariff under the new Section 301 regime remains unjustified and continues to impact India’s gem and jewellery exports. While India’s placement in the lower tariff band provides a relative advantage for jewellery exports, the remaining tariff gap, particularly for natural diamonds and coloured gemstones, highlights the need for an early India–U.S. Bilateral Trade Agreement that can secure tariff relief similar to that enjoyed by countries such as the European Union and Malaysia.”
Competitive Advantage for India
Under the new framework, Indian exports face a 10% additional tariff, compared to the 12.5% tariff imposed on competing manufacturing and trading centres such as China, Hong Kong, Thailand, Türkiye, the UAE, Israel and Vietnam. This offers Indian exporters a modest pricing advantage in the U.S. market.
Ongoing Industry Challenges
Despite this advantage, significant hurdles remain. Belgium, a major global diamond trading hub within the European Union, continues to enjoy zero additional tariff on natural diamond exports to the U.S., while comparable Indian-origin diamonds are subject to the 10% Section 301 duty.
Jewellery exports from India also continue to attract the standard U.S. Most Favoured Nation (MFN) duty of 5.5% to 6%, in addition to the new 10% tariff, resulting in an effective import duty of approximately 15.5% to 16%.
Lab-grown diamonds and synthetic stones remain covered under the additional 10% tariff. Meanwhile, several major diamond-producing countries, including Botswana, Namibia, the Democratic Republic of the Congo, Zimbabwe, Sierra Leone, Liberia, Ghana, Tanzania and Mauritius, are not included in the current Section 301 action. However, rough diamonds processed in India are considered Indian-origin products and therefore attract the additional tariff when exported to the U.S.
GJEPC Calls for Tariff Relief
GJEPC has reiterated that natural diamonds and coloured gemstones should be recognised as essential raw materials for jewellery manufacturing and included under Annex III exemptions from the additional tariff.
The Council is also continuing discussions with the Government of India to accelerate negotiations for an India–U.S. Bilateral Trade Agreement (BTA), aiming to reduce tariff barriers and improve the global competitiveness of India’s gem and jewellery exports in the U.S. market.
