Indian diamond and jewellery exporters are accelerating production and rushing US-bound shipments to beat a potential 100% tariff that could take effect from October 18, 2026, under the newly signed Sanctioning Russia and Iran Act. The legislation, signed by President Donald Trump on September 18, authorizes tariffs of up to 100% on imports from countries that are major buyers of Russian oil or facilitators of sanctions evasion.

 Units in Mumbai’s SEEPZ and Surat’s diamond-cutting hub have extended working hours to clear Christmas and holiday-season orders before October 16, amid uncertainty over possible duties under the Sanctioning Russia and Iran Act.

Tariff threat and legislative background

• Legislation: The Sanctioning Russia and Iran Act was passed by the US House and signed into law by President Trump on September 18, 2026.
• Tariff authority: The law gives the US administration authority to impose additional tariffs of up to 100% on goods from countries falling within specified categories relating to Russian energy purchases or sanctions evasion.
• Implementation window: The additional tariffs could be implemented from October 18, 2026, though the law does not automatically impose the maximum rate on India.
• Why India is at risk: India remains a major buyer of Russian crude—Russia supplied about 30.3% of India’s crude imports in fiscal 2026, worth $40.8 billion—placing it within the scope of the legislation.

Industry response: overtime, extended shifts, and export rush

The threat of steep duties has triggered an all-hands-on-deck response across India’s key gems and jewellery hubs:

• Mumbai SEEPZ: The 140 gem and jewellery units in Mumbai’s SEEPZ special economic zone have introduced overtime for about 80,000 workers to clear orders as fast as possible.
• Surat diamond hub: Around 4,000 diamond-cutting and polishing units in Surat have extended working hours, with the surge also visible in smaller units across Saurashtra, Bhavnagar and Amreli.
• Target deadline: Exporters are aiming to clear confirmed Christmas and holiday-season orders before October 16, two days ahead of the potential October 18 implementation date, to ensure goods arrive and clear US customs before any new duties apply.

This period coincides with the peak US holiday ordering season, intensifying the pressure to ship early. Smaller units in Gujarat’s diamond belt are ramping up hours to meet export commitments.

Strategic shifts: inventory, contracts and risk allocation

Beyond production speed, the uncertainty is reshaping how exporters manage commercial risk:

• US-based inventory: Some companies are keeping stock closer to US customers through US-based inventory and fulfillment operations to reduce exposure to last-minute duty changes at the border.
• Contract rewrites: Others are revising contracts to clarify who will bear any additional duty if tariffs are imposed, shifting from informal understandings to explicit duty-allocation clauses.
• Buyer coordination: Exporters are working closely with US buyers to prioritise confirmed orders and accelerate documentation and logistics for pre-deadline clearance.