National News
Trump’s reciprocal tariffs spark job loss fears in GJ sector
The U.S. government’s move to impose reciprocal tariffs has sent ripples of concern through India’s gem and jewellery sector, a vital component of the nation’s economy. Here’s a breakdown of the key issues and implications:
The Core Issue: Reciprocal Tariffs and Trade Imbalance
Unequal Tariff Structures: The heart of the issue lies in the perceived imbalance in tariff structures between the U.S. and India. India currently levies a 20% tariff on gold jewellery imported from the U.S., while the U.S. applies a significantly lower duty of 5.5-7% on Indian gold jewellery. Similarly, India imposes a 5% tariff on cut and polished diamonds, whereas the U.S. has historically maintained zero tariffs on these Indian exports. This discrepancy has prompted the U.S. to consider reciprocal tariffs, aiming to create a more level playing field.
Potential Impact on Exports: The U.S. is a critical market for Indian gem and jewellery exports. Any increase in U.S. tariffs would directly raise the cost of Indian products for American consumers, potentially reducing demand and negatively impacting export volumes.
Key Export Categories at Risk: The primary export categories facing potential disruptions include:
• Cut and polished diamonds: A major export segment, historically enjoying tariff-free access to the U.S. market.
• Studded gold jewellery: A significant contributor to export revenue.
• Plain gold jewellery: Another essential export commodity.
• Lab-grown diamonds: A growing sector within the Indian gem and jewellery industry.
Economic and Social Implications for India
• Impact on Export Revenue: A decline in gem and jewellery exports would directly affect India’s foreign exchange earnings.
• Employment Concerns: The industry is a significant employer, providing livelihoods to over two million people, with a substantial portion being women and individuals from economically disadvantaged backgrounds. Tariff-induced disruptions could lead to job losses and economic hardship for these vulnerable populations.
• Industry Vulnerability: While not the single largest export driver, the gem and jewellery sector holds a vital position in India’s economy. Its labor intensive nature, and the high value of its exports makes it very important.
• Trade Relations: The tariff issue has the potential to strain trade relations between India and the U.S., potentially impacting other areas of economic cooperation.
Factors to Consider
• Market Dynamics: The extent of the impact will depend on the magnitude of the tariff hikes and the ability of Indian exporters to absorb the increased costs or find alternative markets.
• Negotiations: The outcome will also depend on the results of ongoing or future trade negotiations between the two countries.
• Lab-grown Diamonds: The lab-grown diamond market is fairly new, and very dynamic. Any tariff changes could drastically alter the market share of Indian companies in the United States.
In essence, the potential imposition of reciprocal tariffs by the U.S. poses a significant challenge to India’s gem and jewellery industry, with potential ramifications for export revenue, employment, and overall economic stability.
National News
GJEPC addresses issue of Termination of IEEPA-Based Reciprocal Tariffs
GJEPC informed all exporter members of an important interim development concerning U.S. import duties applicable to Indian exports, particularly in the gem and jewellery sector.
The Gem & Jewellery Export Promotion Council (GJEPC) informed all exporter members of an important interim development concerning U.S. import duties applicable to Indian exports, particularly in the gem and jewellery sector.
A letter issued by Sabyasachi Ray, Executive Director, GJEPC, addressed the Termination of IEEPA-Based Reciprocal Tariffs and outlined key implications for exporters.

Termination of IEEPA-Based Reciprocal Tariffs
Pursuant to the Executive Order dated February 20, 2026, titled “Ending Certain Tariff Actions”, the additional ad valorem duties imposed under IEEPA, including the reciprocal tariff framework under Executive Order 14257, shall no longer remain in effect and are directed to be terminated as soon as practicable.
Accordingly, entries made on or after February 20, 2026 should not be subject to the earlier IEEPA-based reciprocal tariffs.
1. Interim Window Prior to Section 122 Surcharge
A separate Presidential Proclamation dated February 20, 2026 imposes a temporary 10% surcharge under Section 122 of the Trade Act of 1974, effective 12:01 a.m. EST on February 24, 2026.
Therefore, between: February 20, 2026 – before 12:01 a.m. EST on February 24, 2026 imports into the United States should be subject only to ordinarily applicable HTSUS (MFN) rates, without the earlier reciprocal tariff, and prior to the commencement of the Section 122 surcharge.
For products such as cut and polished diamonds (where the MFN rate is ordinarily 0%), this period represents a limited operational window.
2. Refund Position (If Collected in Error or Due to Implementation Lag)
In cases where reciprocal IEEPA duties are collected due to implementation lag, such duties should be eligible for refund through the standard:
- U.S. Customs and Border Protection (CBP) protest mechanism under 19 U.S.C. §1514, or
- Post-summary correction procedures, as applicable.
However, exporters should note that there is no assurance that the refund process will not be time-consuming.
3. Important Caution for Exporters
While GJEPC is actively engaging with U.S. customs authorities and keeping customs at Bharat Diamond Bourse informed, members are strongly advised to:
- Seek confirmation from their U.S. customs broker and trade counsel
- Obtain written confirmation from their U.S. buyer/importer regarding entry treatment
- Confirm that CBP has ceased collection of the reciprocal tariff at the port of entry
Given the evolving implementation environment, entry-level verification is critical.
Members are encouraged to carefully assess:
- Shipment timing
- Entry dates
- Applicable HTS classification
before dispatching consignments, wherever applicable.
source: GJEPC
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