The new Section 301 tariff raises effective US import duties on Indian jewellery to as much as 16 per cent. While India retains an advantage over countries facing a 12.5 per cent levy, GJEPC has urged an early India-US trade agreement to narrow the tariff gap
Indian gems and jewellery exporters face fresh pressure in the US market after Washington imposed an additional 10 per cent tariff on Indian exports under its new Section 301 regime. The Gem and Jewellery Export Promotion Council (GJEPC) said the measure could pose challenges for exporters despite India retaining an advantage over some competing markets.
The new Section 301 tariff regime came into effect on July 24, replacing the temporary 10 per cent tariffs imposed under Section 122. The move followed investigations by the United States Trade Representative (USTR) into the implementation and enforcement of prohibitions on imports produced with forced labour across 60 economies.
Under the revised framework, Indian exports face an additional tariff of 10 per cent. India, however, remains relatively better placed than China, Hong Kong, Thailand, Türkiye, the UAE, Israel and Vietnam, which face a higher additional tariff of 12.5 per cent.
The tariff gap remains a concern in the natural diamond segment, where some competing markets continue to enjoy duty-free access. The European Union, including Belgium, faces zero additional tariff on natural diamonds, while comparable Indian-origin diamonds attract a 10 per cent duty, GJEPC said.
Several major diamond-producing countries also remain outside the scope of the current Section 301 action. These include Botswana, Namibia, the Democratic Republic of the Congo, Zimbabwe, Sierra Leone, Liberia, Ghana, Tanzania and Mauritius, according to the council.
Jewellery Faces Higher Duties
Indian jewellery exports will continue to attract the existing US Most Favoured Nation duty of 5.5 per cent to 6 per cent. With the additional 10 per cent Section 301 tariff, the effective import duty on jewellery rises to about 15.5 per cent to 16 per cent. Lab-grown diamonds and synthetic stones will also remain subject to the additional 10 per cent tariff. GJEPC Chairman Kirit Bhansali said the new levy was unjustified and would remain a challenge for India’s gem and jewellery exports, particularly when competing diamond trading centres continue to enjoy duty-free access for natural diamonds.
Bhansali said India’s placement in the lower tariff band provides some relative competitiveness for jewellery exports compared with countries facing the 12.5 per cent levy. However, he said bridging the remaining tariff gap through an early India-US Bilateral Trade Agreement and securing relief for natural diamonds and coloured gemstones remain key priorities.
GJEPC also rejected any suggestion linking India’s gem and jewellery sector with forced labour. The council welcomed the government’s recent amendment to the Foreign Trade Policy prohibiting imports of goods produced wholly or partly with forced labour.The council said it is engaging with the government to pursue an early India-US Bilateral Trade Agreement. It said an agreement could help bridge the tariff gap and enhance competitiveness.
