Tariff Cut Boosts India’s Gems and Jewellery Sector as Exporters Eye Sharp 2026 Revival

India’s gems and jewellery sector is positioned for a significant revival in 2026 following the India‑US trade deal that slashed tariffs from 50% to 18%. The reduction has been welcomed by industry participants who endured a sharp drop in shipments over the past year as US buyers shifted to countries with lower duty structures.

Adil Kotwal, Chairman of the SEEPZ Gems & Jewellery Manufacturers Association in an interview with CNBC TV18, said that the tariff cut brings long‑awaited relief and restores India’s competitiveness against Asian peers. The sector believes this move will help reverse the steep downturn that saw exports lose considerable momentum.

Steep Export Decline Triggered by High Tariffs

Kotwal explained that India’s exports to the US had fallen sharply as buyers shifted orders to regions offering more favourable tariff structures. He noted that India’s jewellery exports recorded a 44% decline, with destinations such as Bangkok and Vietnam attracting business due to lower duties.

The higher 50% tariff on Indian goods created a significant disparity that diverted demand away from Indian manufacturers. As a result, market share slumped, prompting calls for government intervention to restore parity.

Tariff Reduction Restores Competitiveness Against Asian Peers

The shift to an 18% tariff resets the competitive landscape for Indian exporters, bringing India back in line with other Asian suppliers. Kotwal stated that the revised rate provides a “level playing field” with countries like Thailand and Vietnam, which previously enjoyed a distinct advantage.

With Indian exporters regaining pricing competitiveness, manufacturers expect stronger order inflows from US retailers. The improved tariff structure also aligns more closely with India’s established expertise in diamond processing and jewellery manufacturing, giving exporters confidence in reclaiming lost demand.

Low US Retail Inventory Seen as Demand Catalyst

A key supportive factor for the sector is the unusually low jewellery inventory held by US retailers. Kotwal highlighted that retailers in the US are currently operating with limited stock, which could translate into higher order volumes in the coming quarters.

He indicated that the sector expects 2026 to be a strong year as inventory replenishment cycles gather pace. The combination of lower tariffs and low stock levels provides favourable conditions for a demand rebound.

Read More: Soaring Gold Prices Push Titan Towards Lab-Grown Diamonds.

Conclusion

The India‑US tariff reduction marks a turning point for India’s gems and jewellery sector, offering renewed competitiveness and a pathway to reclaim export momentum. With the tariff gap eliminated, Indian manufacturers are better positioned to win back orders that shifted to other Asian markets.

Low retail inventories in the US further strengthen demand prospects for 2026. As exporters aim to return to pre‑decline levels, India’s strong manufacturing base and financing ecosystem are expected to play a central role in driving recovery.

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