Gems, Gold and Jobs on the Line as US Tariffs Bite

Indian gems and jewellery exports are expected to lose their shine under Donald Trump’s tariff bombshell. The additional 25% tariff, which takes the total on select Indian goods imported to the US to 50%, came into effect on August 27.  

The product range includes studded and plain gold jewellery, diamond pieces, coloured gemstones and fashion-forward silver designs. India exports nearly $30bn worth of such ornaments globally, of which around $10bn, more than one-third, goes directly to the US market. 

If indirect exports are included, such as diamonds sent to Hong Kong, China, Vietnam or Thailand before reaching the US as jewellery pieces or those sent to Switzerland to be set into watches, the share rises by another 12–13%, according to Ajesh Mehta, convener, Diamond Panel, Gem and Jewellery Export Promotion Council (GJEPC), the government apex body promoting export growth. 

Together, direct and indirect shipments mean roughly 45% of India’s gems and jewellery exports are tied to the US, he told Outlook Business.  

Mehta said India’s jewellery exports dropped by 32% from April to July 2025 due to the earlier 10% tariff. “Now with 50% tariffs, we do not see a favourable environment at all. Exporters are uncertain whether to ship diamonds so the entire value chain is impacted,” he said. 

“It is almost a deadlock for the US market,” Mehta noted. While the industry exports a wide range of jewellery products, insiders said the steep 50% duty is expected to hit plain jewellery and diamond-studded pieces the hardest. 

Diamonds, Plain Gold Hardest Hit 

“Plain gold and diamond-studded jewellery are being impacted the most since they account for nearly 85% of India’s US jewellery exports. The high duties make these expensive pieces face the greatest competitive disadvantage,” said Disha Shah, founder and designer at DiAi Designs. 

Shah added that light gold and silver jewellery remains within reach and is seeing higher consumer demand. The lab-grown diamond market, still small, is less exposed because of its lower cost. 

Mehta said the concern goes further. Every product category will be affected but diamonds will be hit the hardest, especially natural diamonds. 

“The diamond industry might feel it more deeply because it generates a huge number of employment opportunities. Silver and lower-cost jewellery might find alternative markets but US demand for diamonds is much harder to replace,” a senior industry executive said on condition of anonymity. 

India exported about $4.8bn worth of cut and polished diamonds to the US in the fiscal year ending March 2025. That made up more than one-third of its total such exports, which stood at $13.2bn, according to GJEPC. 

Orders on Hold, Market Shifts 

Shah said the US is looking for renegotiations to spread the burden of higher duties. Some American jewellery importers are exploring markets like Vietnam, Thailand and Botswana where tariffs are lower. 

“In the medium term, some retailers are set to redirect sourcing, especially for mass-market or lower-value jewellery, to countries like Thailand and Vietnam with fewer tariff barriers,” she said. 

Mehta has seen a similar trend. Retailers in the US have put their September orders on hold as they want clarity on tariffs before deciding the order size. “Some manufacturers are shifting to tariff-friendly countries like Turkiye, Dubai or Thailand where tariffs are 10–15%. Jobs in India are at risk of being diverted to those centres.” 

Some of India’s biggest diamond companies have started adjusting their strategies. Large firms such as Kiran Gems, Hari Krishna Exports and Shree Ramkrishna Exports have set up operations closer to mining hubs, including Botswana and South Africa, for cutting and polishing, the person quoted above said. 

“Others are exploring manufacturing or contract manufacturing in Turkiye, Thailand and Vietnam. But such cases are limited to very large players. Most exporters still rely heavily on India because of its skilled workforce and quality standards. Shifting operations carries risks to quality which neither Indian manufacturers nor US retailers will compromise on,” he added. 

When it comes to diamond processing, India’s scale, capability and heritage make a complete realignment unlikely, Shah said. “What one anticipates is more of a partial rebalancing where some categories get deconcentrated but India still leads in premium and large-volume segments.” 

Industry Seeks Policy Lifeline 

Industry leaders warn that without government intervention, revenues and jobs in major export hubs could face sharp cuts. They demand an urgent policy drive to mitigate tariff shocks, safeguard jobs and maintain India’s global leadership in gems and jewellery. 

“America could drop by more than 50% since these tariffs came into effect,” said Colin Shah, managing director, Kama Jewellery. He suggested reforms including clearer labour laws to boost productivity and worker welfare while fast-tracking the long-pending special economic zone (SEZ) amendment for the survival of export hubs, particularly for reverse job work. 

For e-commerce exports, he believes reducing logistics hurdles and streamlining payment systems, returns and freight rules will help India compete with global centres like Dubai and Hong Kong. A simplified one-stage GST model is also important to cut compliance costs and ease working capital pressures alongside export-focused income tax policies with lower rates, faster dispute resolution and quicker refunds. 

“Interest subvention on export credit, both pre- and post-shipment, must be guaranteed for at least five years to protect jobs and support MSMEs through volatile demand cycles. At the global level, exporters are calling for strategic bilateral trade agreements with key markets such as China, Brazil, South Africa and the EU. Predictable rules of origin, fewer non-tariff barriers and protections for high-value categories like certified diamonds and branded jewellery would secure long-term market access,” he added. 

The GJEPC has also asked the government for duty drawbacks to partially offset the tariff burden, a reverse job-work model abroad to keep exports flowing and financial relief such as moratoriums on loan repayments since many exporters took loans in anticipation of orders that are now stalled. 

Shah suggested support for technology upgradation and skill enhancement to help manufacturers remain efficient and cost-competitive. Easing procedures for export clearances and logistics can also boost India’s reputation as a dependable sourcing destination. 

Indian Jewellers Brace for Change 

DiAi Designs has started focusing on lighter-weight collections and design innovations to keep prices accessible. Exporters acknowledge that while the US remains the largest consumer of Indian diamond and gold jewellery, emerging markets are beginning to attract attention. 

“Markets like Association of Southeast Asian Nations, West Asia and the South Asian Association for Regional Cooperation present immense potential due to rising affluence, evolving consumer taste and cultural openness to studded jewellery. Domestic consumption has also been steadily growing which adds to the sector’s resilience,” said Tehmasp Printer, managing director of International Gemological Institute. 

Exporters have also started receiving inquiries from Australia, the US, Southeast Asia, Latin America and West Asia for strategic partnerships. Though these markets will not replace the US overnight, they could help cushion the blow and gradually diversify India’s jewellery export basket.