As per the interim agreement, the tariff on CPDs has been rolled back to 18% from 50% by the US government.
The reciprocal tariffs imposed by the US on diamonds, which surged the duty on polished diamonds and coloured gemstones to 50% last August, saw export of CPDs from India to the US drop by over 60% (from USD 3,636.36 million to USD 1,450 million) between April and December 2025, according to a statement by Gems and Jewellery Export Promotion Council (GJEPC).
The US, which is India’s largest gems and jewellery export market accounting for 31% of its total exports (USD 9.23 billion in 2024-25) in this sector, saw exports drop by 44.42% in the period. The primary export commodities include CPDs, gold jewellery, polished lab-grown diamonds, silver jewellery, precious and semi-precious coloured gemstones and imitation jewellery.
The joint statement on Saturday said the US, “… will remove the reciprocal tariff on a wide range of goods identified in the Potential Tariff Adjustments for Aligned Partners Annex to Executive Order 14346 of September 5, 2025 (Modifying the Scope of Reciprocal Tariffs and Establishing Procedures for Implementing Trade and Security Agreements), as amended, including generic pharmaceuticals, gems and diamonds, and aircraft parts”.
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Last year, the UK in its trade agreement with India dropped import duty on cut and polished diamonds and gold jewellery, which brought some relief for the exporters.
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GJEPC chairman Kirit Bhansali said in a statement: “GJEPC is optimistic that, following India’s signing of the trade deal, loose diamonds and coloured gemstones from India will get the benefit of zero-duty imports into the USA, vide Annexure 3 of the US reciprocal tariff list, providing much-needed support for diamond exports.”
About the trade disruption last financial year, Bhansali said the duties on polished diamonds and gemstones surged from zero to 10% in April, then to 50% by August which was “unviable for these raw materials, which strained working capital, liquidity and margins. Jewellery duties jumped from 5-7% to 55-57%”.
Surat’s diamond industry has been facing a crisis since April 2022 when the US and the EU imposed sanctions on the Russian state-owned Alrosa, the world’s largest diamond mining company, after the Russia-Ukraine war. Indian Diamond Institute Chairman Dinesh Navadiya said, “Over 30% of the rough diamonds are imported from Russia to Indian market. Later, the Israel-Hamas and the Iran war also impacted the industry. A major blow came from the US again with a 50% tariff on the exports of Indian goods.”
He said the FTA signed with the EU brought in “good news”. “Now with the US reducing tariffs to 18%, the diamond industry in Surat will gain further advantage as new opportunities are explored in the EU. The diamond exporters will now receive more new orders, and exports will increase in the future.”
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Rajesh Rokde, Chairman, All India Gem & Jewellery Domestic Council (GJC) described the reduction of tariff as “not just a financial adjustment” but a recognition of “unmatched artistry and craftsmanship that our industry brings to the world”.
Rokde told The Indian Express, “By lowering barriers in one of the largest consumer markets, our exporters will gain a stronger foothold, while our artisans will see their creations reach new audiences. This strengthens our global competitiveness and instils confidence across the supply chain… ”
While Surat cuts eight of 10 diamonds in the world, the industry employs over 8 lakh people in cutting, polishing and trading of diamonds. Surat Diamond Association president Jagdish Khunt said, “Many diamond polishers faced financial problems over last three years due to industry’s recession, but those dark days are gone. New demands will come, and factories will start functioning with full production. The industry has already made a demand before the government to negotiate with the US counterparts and get relief in tariff on CPD and diamond-studded gold jewellery.”
