US President Donald Trump announced a 25% additional tariff on India, effectively taking the total tariff to 50%. The move is likely to severely impact domestic export sectors such as gems and jewellery, textiles, leather amongst others.

Think tank GTRI says the new tariffs are expected to make Indian goods incredibly expensive in the US, with potential to cut US-bound exports by 40–50 %. This 50% tariff has prompted the Indian GJ industry to explore setting up manufacturing units in low tariff nations like Dubai and Mexico from where they can directly export to the US.

The US is the largest market for Indian exporters of diamonds and studded jewellery worth $10-billion as of 2024-25. The United Arab Emirates faces a 10% tariff while Mexico 25%.

GJEPC Chairman Kirit Bhansali said the 50% tariff is a doomsday for the Indian gem and jewellery sector. We have to find alternate ways to do business with the US, he said. “We will reroute our products through other countries after studying the tariff structure of that country with the US. We will set up manufacturing units there quickly. Dubai is the nearest destination for us. We will also look into rerouting studded jewellery through Mexico, if required. However, we will do everything legally,” Bhansali said.

The imposition of a 25% tariff on Indian gold jewellery exports-already in effect-and the additional 25% set to be enforced from 27th August represent a compounded blow to the sector. This steep escalation not only renders our products significantly less competitive in the U.S. market, but more critically, it jeopardizes the livelihoods of thousands of skilled artisans who depend on export demand for their survival.

These craftsmen-many from marginalized communities are the backbone of India’s jewellery ecosystem, preserving centuries-old techniques through small workshops and family-run enterprises.
A cumulative 50% tariff threatens widespread job losses, destabilizes local economies, and risks eroding a rich cultural heritage. We urge the government to act swiftly and engage in trade negotiations that protect these livelihoods and uphold India’s global leadership in handcrafted jewellery” said – Rajesh Rokde – Chairman – GJC.

The 25% tariff on Indian gold jewellery exports-already in effect-with an additional 25% set to begin on 27th August, delivers a compounded blow to the sector. It makes our products less competitive in the U.S. market and jeopardizes the livelihoods of thousands of skilled artisans, many from marginalized communities, who sustain India’s centuries-old jewellery craftsmanship through small workshops and family enterprises.

This tariff shock is also pressuring the Indian Rupee, likely making gold costlier for domestic consumers and dampening demand within India-further straining the industry. We urge the government to act swiftly and engage in trade negotiations to protect jobs, stabilize currency impact, and preserve India’s global leadership in handcrafted jewellery” said, Avinash Gupta – Vice Chairman – GJC

A team from the US gem and jewellery industry is visiting India on August 19 to hold talks with the industry body and union commerce ministry on the tariff issue. There are 70,000 small and medium jewellery retail outlets in the US who largely source jewellery from India.