President Trump announced on Monday that the United States has reached a trade agreement with India that may mean an 18% duty on finished jewelry while applying 0% duty to gems. The administration framed the change as part of a broader trade package; if enacted as outlined, the split—18% for set jewelry, 0% for loose gems—could change wholesale margins and sourcing strategies for US jewelers.

  • Announcement: President Trump, Monday (trade agreement with India)
  • Potential duty: 18% on finished jewelry; 0% on gems
  • Scope indicated: U.S.–India trade; conceivable distinction for cut (but not set) natural gems
  • Primary market impact: US retail and wholesale import flows

Context: Where this fits in 2025–26 trends

The proposed duty split intersects with three persistent industry currents. First, India remains the global hub for cutting, polishing and finishing—from open‑backed sapphire settings to micro‑pavé pavings—so any tariff differential between loose stones and completed mounts recalibrates where value is added. Second, retailers have been shifting assortments toward customization and loose‑stone sales; a 0% duty on gems would strengthen that tilt by reducing landed cost for retailers that buy cut stones and perform domestic setting or bespoke work. Third, traceability and origin disclosure continue to be differentiators: buyers increasingly expect provenance statements for natural gemstones and recycled metals. That emphasis on origin pairs uneasily with a duty regime that may favor importing loose stones for local finishing rather than fully traceable finished pieces.

Impact: Why this matters in the US market

For US retailers and wholesalers the possible 18% duty on finished jewelry but 0% on gems is an operational and margin consideration rather than a simple price change. Practical implications include:

  • Merchandising and inventory: Retailers that sell finished bracelets, dagger‑thin knife‑edge rings or satin‑finished gold necklaces may see margins compressed relative to sellers of loose gems or in‑house‑set pieces. Allocating more SKU space to loose, well‑graded stones—described with cut, color, clarity and origin—can mitigate duty exposure.
  • Sourcing and production strategy: Brands that can shift finishing and setting onshore—domestic setting to avoid the higher duty on finished imports—should cost the change carefully. For others, renegotiating terms with Indian cutters and setters or changing FOB/CIF arrangements will be necessary to protect gross margin.
  • Pricing and quoting: Wholesale buyers should model landed costs both for set jewelry and for loose stones plus local setting labour. Communicating attributes that justify premium (e.g., vitreous luster, silky nacre in pearls, American setting work such as precise micro‑pavé and secure knife‑edge shanks) will help preserve selling price where duty pressure exists.
  • Marketing and compliance: Emphasize provenance, certification and chain‑of‑custody in product descriptions. A duty regime that lowers the cost of loose natural gems creates an opening to sell customization and in‑store setting as a value proposition tied to traceability and craftsmanship.

Until any tariff schedule is published and binding rules of origin and classification are confirmed, jewelry professionals should treat the announcement as a credible signal rather than final law. The immediate actionable steps are cost modelling, inventory review, and conversations with Indian partners about shipment classifications and lead times.

Image Referance: https://www.jckonline.com/editorial-article/us-india-deal-jewelry-gems/