The United States’ decision to impose a 10 per cent additional tariff on Indian exports under its new Section 301 forced-labour regime has put the country’s gems and jewellery exporters under pressure, although India has secured a tariff advantage over several competing manufacturing and trading hubs, say exporters.
The Gem and Jewellery Export Promotion Council (GJEPC) said the new tariff will pose challenges for Indian exporters, particularly as key competing diamond trading centres, such as in the European Union and Africa, continue to enjoy duty-free access for natural diamonds.
“European Union (Belgium), a global diamond trading hub, continues to enjoy a zero per cent additional tariff on natural diamonds, while comparable Indian-origin diamonds attract a 10 per cent duty, creating a significant competitive gap for Indian exporters,” GJEPC noted in a press statement on Saturday.
While India enjoys a tariff advantage over countries such as China, Hong Kong, Thailand, Türkiye, the UAE, Israel and Vietnam, which are being charged a higher additional tariff of 12.5 per cent, several major diamond-producing countries, including Botswana, Namibia, the Democratic Republic of the Congo, Zimbabwe, Sierra Leone, Liberia, Ghana, Tanzania and Mauritius, remain outside the scope of the current Section 301 action, the statement noted.
The new Section 301 tariff regime, which came into effect on July 24, replaces the temporary 10 per cent Section 122 tariffs, following investigations by the United States Trade Representative (USTR) into the implementation and enforcement of prohibitions on imports produced with forced labour across 60 economies.
Jewellery exports will continue to attract the existing US MFN duty of 5.5 per cent-6 per cent, in addition to the additional 10 per cent Section 301 tariff, taking the effective import duty to approximately 15.5 per cent–16 per cent. Lab-grown diamonds and synthetic stones also remain subject to the 10 per cent additional tariff.
“Imposing a 10 per cent US tariff under the new Section 301 regime, which is not at all justified, remains a challenge for India’s gem and jewellery exports, particularly as key competing trading centres in diamonds continue to enjoy duty-free access for natural diamonds,” GJEPC Chairman Kirit Bhansali said.
He said India’s placement in the lower tariff band provides some relative competitiveness for jewellery exports but added that bridging the remaining tariff gap through an early India-US Bilateral Trade Agreement and securing tariff relief for natural diamonds and coloured gemstones remain key priorities.
The council rejected any suggestion that India’s gem and jewellery sector is linked to forced labour and welcomed the government’s recent amendment to the Foreign Trade Policy prohibiting imports of goods produced wholly or partly with forced labour.
“The council is actively engaging with the government to pursue an early India–US Bilateral Trade Agreement (BTA) to bridge the tariff gap and enhance the competitiveness of India’s gem and jewellery exports in the US market,” the statement highlighted.
Published on July 25, 2026
