What the U.S.–India Trade Deal Means for Jewelry Retailers Right Now

THE NEW U.S.–INDIA trade agreement is being talked about as a big win for the global diamond and gemstone trade — but for U.S. jewelers, the real story is less about geopolitics and more about whether sourcing will finally feel normal again.

For months, tariffs have been a moving target, sending costs higher, slowing delivery times and forcing suppliers to reroute production through third countries just to make the math work. The latest agreement promises relief, particularly for natural diamonds and gemstones cut in India, though much of that relief hinges on an interim agreement that still needs to be finalized — which, according to India minister of commerce and industry Piyush Goyal, should happen sometime in March.

Once that interim deal is in place, cut-and-polished natural diamonds and colored gemstones from India are expected to enter the U.S. at zero duty. That’s the headline everyone is watching. Until then, those goods remain subject to a 25% tariff, down from the briefly imposed 50% rate that sent shockwaves through the trade last August.

The Damage So Far

India’s Gem & Jewellery Export Promotion Council (GJEPC) has been vocal about how damaging those tariff swings have been. The U.S. is India’s largest jewelry export market, accounting for roughly a third of total gem and jewelry exports. When duties began climbing in 2025, trade slowed quickly. According to GJEPC, exports to the U.S. fell more than 44% between April and December, with polished diamond exports alone dropping over 60%.

That pressure has been felt acutely at the manufacturing level. Kalpesh Jhaveri, CEO of K.R. Gems and Diamonds International, says the agreement offers hope, but also leaves critical questions unanswered.

“The deal is still unfolding, so it’s a little hard to say how it will affect the industry,” Jhaveri says. “As of now, it’s not completely clear if it will be the 18% along with other goods, or if natural diamonds will be ‘0’ percent as a product not found in the U.S. What happens to lab-grown diamonds, which, as a product, are also grown in the USA?”

Jhaveri notes that while tariff relief could ease costs, it may also reshape competition in ways retailers will feel directly. “The absence of tariffs allows for free-flowing availability of goods, which in turn intensifies competition from online sellers,” he says. “Many of these platforms are supplied directly by large overseas manufacturers, creating direct competition with their own retail partners — impacting both traditional brick-and-mortar stores and U.S.-based, domestically supplied e-tailers.”

Relief Where It Counts

Nevertheless, there are more benefits than drawbacks to the new agreement. Sanjay Hirawat, vice president of Shefi Diamonds, says the trade deal offers meaningful relief at a time when the market is under strain.

“With the current state of the diamond market, the new U.S.–India trade deal gives a lot of relief to the loose diamond suppliers and manufacturers from India,” Hirawat says. “Although it might not be the best thing for vendors who are inherently sitting on inventory here in the U.S., for jewelry manufacturers dealing with precious metal price fluctuations recently, the tariff relief allows for faster delivery times and less hassle for wholesalers in the United States. Let’s hope the trade talks continue and we go back to where we were.”

For finished jewelry manufacturers, tariffs haven’t been the only pressure point. Sweta Jain, founder, designer, and owner of Goshwara, says the past several months have been extremely challenging, with rising duties colliding with record gold prices.

“The past six months have been hurting everyone in the industry not only with the tariffs, but also with gold prices,” Jain says. “This new tariff deal gives us room to breathe, especially considering the volatile gold market. We look forward to passing on the cost benefit to our partners.”

Disha Shah, founder and designer for DiAi Designs, agrees, and says the new deal could actually be a boon to India’s lab-grown diamond sector as well: “Lower tariffs and simpler trade rules are giving a lift to India’s gems and jewelry sector. There is renewed interest in sourcing from India instead of looking overseas. The relevance of this shift is also seen in the lab-grown diamonds sector, where exports could increase significantly, putting Indian lab-grown diamonds in a stronger position in both price and reliability.”

Not All Goods Are Created Equal

Even with the agreement in place, finished jewelry remains more complicated than loose stones. Indian-made jewelry is expected to carry a duty of roughly 24% once the interim agreement is signed — 18% plus the longstanding 6% Most Favored Nation (MFN) duty. One key exception remains: jewelry cast in the United States continues to be considered U.S.-origin, even if stones are set and finishing is completed in India.

Manish Kala, proprietor of Kanchan Gems & Jewellery, sees the agreement as a positive signal for long-term growth. “The new trade agreement between the U.S. and India will surely help the business between both countries,” Kala says. “As the tariff goes down to 18%, it will help both countries to grow their business, especially gems and jewelry. It is a very good sign and we hope it will allow us to grow at a good pace.”

For colored stone suppliers, the agreement could unwind years of tariff-driven detours. Yash Dhamani, owner of National Facets, says when duties briefly surged toward 50%, Indian suppliers were forced to find alternative routes just to stay competitive.

“Just under 10 days back, the duty was about 50%, and that was unimaginable for our clients to pay,” Dhamani says. “A lot of the vendors were trying to open offices in Bangkok and Dubai and grow the material from there, which was adding cost and hassle.”

Those workarounds often meant gemstones cut in India were shipped to Bangkok for jewelry manufacturing, then sent on to the U.S. because duties there were lower. With India now expected to land at an 18% rate for jewelry — and zero for unset natural stones — Dhamani believes the incentive to detour is disappearing.

“Now that the duty in India is 18%, it becomes much more attractive to source it back from India,” he says.

Dhamani says that renewed optimism is already showing up at trade events. “Usually, India has about 300 vendors at GJX [Gem & Jewelry Exchange in Tucson], but this year only about 100 vendors showed up,” he says. “After this, a lot more people will be hopeful again with the U.S. market and they will start taking the risk again.”

GJEPC Chairman Kirit Bhansali says that confidence is exactly what the sector needs right now. He believes the agreement will lower costs for U.S. importers, provide relief to manufacturers, and help stabilize operations across the value chain. GJEPC remains optimistic that loose diamonds and colored gemstones from India will qualify for zero-duty entry once the interim agreement is finalized, though the council says it is still awaiting detailed notifications.

For U.S. retailers, the deal doesn’t erase the challenges of the past year, but it may finally reduce the constant recalculating. Prices won’t reset overnight, and some friction between old inventory costs and new tariff structures will take time to work through. Still, after months of uncertainty, the direction feels clearer.

What Retailers Should Do Next

Here are a few takeaways for jewelry retailers:

1. Don’t assume every price change is immediate. Zero duty on natural diamonds and gemstones depends on the interim agreement being finalized and implemented, so ask vendors what’s in effect now versus what’s expected later.
2. Have candid conversations about inventory. Some suppliers are carrying goods purchased under higher tariffs, and pricing may normalize gradually rather than all at once.
3. Finally, watch lab-grown diamonds separately. They are not included in the same “carve-outs” as natural stones, and their tariff treatment may continue to differ.