U.S.-India Deal May Mean 18% Duty on Jewelry, 0% on Gems

By Rob Bates | February 03, 2026

President Trump announced on Monday that the United States has reached a trade agreement with India, which conceivably means that cut (but not set) natural gemstones could once again be imported duty-free.

In addition, tariffs on other Indian imports into the United States—including finished jewelry and lab-grown diamonds—will likely fall from the current 50% to 18%.

Trump said the deal will lower the “reciprocal” tariffs on Indian goods to 18% from 25%. The U.S. is also reportedly removing the 25% penalty it added in August to punish India for buying Russian oil.

At press time, the White House has not issued a statement confirming the agreement, and Customs has yet to offer official guidance. However, Indian prime minister Narendra Modi yesterday affirmed that the deal was happening on X, and so did U.S. trade representative Jamieson Greer on CNBC.

Under the agreement, the United States will likely eliminate tariffs on unset diamonds, gemstones, and natural pearls that have been cut in India. A September executive order placed those three products on Annex III, a new roster of goods exempt from tariffs as long as they come from countries that have signed trade deals with the United States. In the jewelry sector, those exemptions have primarily affected diamond exports from the European Union. This new deal could extend that to India. (Finished jewelry is still subject to tariffs.)

Sara Yood, president and CEO of the Jewelers Vigilance Committee, tells JCK there is “no word so far” if the purported deal with India will affect Annex III goods. The September executive order stressed that the president can still impose duties on those items if he chooses.

The executive director of India’s Gem & Jewellery Export Promotion Council (GJEPC), Sabyasachi Ray, agrees that it is “not clear” whether the gemstone duties will be dropped, but says his group was working to clarify that question.

“We need to check whether the Annex III will be applicable automatically when India signs the trade deal,” he says. “Of course, that is the expectation…. But we have to check the fine print to be sure.”

Jewelers of America CEO David Bonaparte was more certain, telling JCK via email, “We expect that [diamonds and precious stones] will be exempt once the deal is considered official and going forward.”

GJEPC chairman Kirit Bhansali said in a statement that the deal was good news for India, as eight months of tariffs have put the country’s jewelry sector “under severe pressure.” He added that from April (when tariffs were first imposed) through the end of December 2025, India’s gem and jewelry exports to the United States fell 44% compared with the prior year. Cut and polished diamond shipments plunged a staggering 60%.

The Indian press has reported that U.S. tariffs have caused at least 135,000 gem workers to lose their jobs, though some have said the number is closer to 400,000.

Analysts noted the announcement came a week after India signed a “landmark” trade deal with the European Union, with the two parties agreeing to phase out most of their tariffs.

(Photo: Getty Images)