Trump Tariffs on India Unsettle Country’s Gem Business

By Rob Bates | July 31, 2025

India’s diamond and gem industry reacted with alarm to President Trump’s announcement yesterday of a 25% tariff on imports from India, with many worrying the new rate would unsettle an already fragile market.

The 25% tariff is due to go into effect tomorrow. It will likely be added to previous tariffs on Indian jewelry, which means that gold items could face levies of 31.5% to 33% and gemstones, 31%–32%.

After announcing the tariffs on social media Wednesday morning, Trump spent the rest of the day giving sometimes contradictory indications about where things stand. He told reporters yesterday afternoon that his administration was “talking to India.” But at midnight, he blasted the country on Truth Social, writing “I don’t care what India does with Russia. They can take their dead economies down together, for all I care.”

Bloomberg reported that Indian officials were “shocked and disappointed” by the tariffs. Many in India’s gem and jewelry industry feel the same.

“This is a deeply concerning development,” Kirit Bhansali, chairman of India’s Gem & Jewellery Export Promotion Council (GJEPC), said in a statement. “The Indian gem and jewelry sector, in particular, stands to be severely impacted.

“A blanket tariff of this magnitude will place immense pressure on every part of the value chain…. We urge the U.S. administration to reconsider, and call on both governments to engage in constructive dialogue that safeguards bilateral trade and protects the millions of jobs that depend on it.”

Colin Shah, managing director of Kama Jewelry and a past GJEPC chair, worries the tariffs will be a “big blow for India.”

“This will severely impact the sectors like gems and jewelry that are heavily dependent on exports,” he tells JCK. “The gems and jewelry industry of India has been bearing the brunt of the prolonged geopolitical tensions between Russia and Ukraine and Middle East for almost over two years. With Trump’s return to power, his tariff threats have impacted Indian markets due to their ambiguous outlook. Going ahead, we expect trade activities to remain muted with the U.S.”

David Bonaparte, president and CEO of Jewelers of America, calls the new tariffs “another major strain on a jewelry supply chain that’s been dealing with 10% tariffs since April.

“Jewelers of America is reaching out directly to the Trump administration, asking for an exemption on the higher tariff rates for diamonds and gemstones—goods that, for the most part, are not mined and produced in the United States,” Bonaparte tells JCK. “Tariffs are a tax on businesses that have no choice but to source their goods from overseas, and while some will adjust, a new normal of even 10% tariffs will be extremely detrimental to a lot of businesses.”

Indian dealers based in the U.S. are trying to stay upbeat, though they don’t expect the issue to be settled anytime soon.

“In the short term it’s going to hurt,” says Nicky Mehta, head of business development for Ashi Diamonds. “I don’t know how much the manufacturers are willing to absorb as far as the 25% tariff.”

He hopes the new levies will send natural diamond prices down.

“That will result in more sales,” he says. “If natural comes down a little bit more, that would make it more affordable and attainable and attract more younger consumers.”

Gems and jewelry is not the only industry coping with higher import taxes, Mehta points out.

“Consumers will take a hit on their total cost of jewelry, but prices are going up on other consumables,” he says. “They will make adjustments. They’re not going to stop buying jewelry.”

Another Indian dealer, who wished to remain anonymous, predicts the tariffs will be around for four to six months, but says the industry will adjust, as it has after past shocks.

“I hope we have some sense and willingness to find common ground,” he adds.

The Jewelers Vigilance Committee has created a tariff tracker, which can be seen here.

(Photo: Getty Images)