India’s gems and jewellery exporters have seen shipments to the United States collapse after the introduction of 50% tariffs, eroding export value and halving the sector’s share of merchandise exports since FY13.
- Price (Tariff rate): 50% (effective September 2025)
- Carat Weight (Post-tariff decline): -69.7% shipments to the US after tariffs
- Origin: India — major cutting and polishing hubs (Surat, Mumbai)
- Date (Latest data): October 2025 (CareEdge; GJEPC reports)
What happened
CareEdge data and industry reports show a sharp contraction in exports after the Donald Trump–led US administration imposed 50% duties on selected Indian goods. Gems and jewellery — which carried a vitreous luster in India’s export ledger a decade ago — recorded a near 70% fall in shipments to the US following the tariff move. The decline followed an earlier 33.9% drop in April–August 2025 and accelerated with changes to pre-order timing and buyer behaviour.
Context within 2025 trends
The downturn is not an isolated shock but part of a broader realignment in 2025. Gems and jewellery’s share of India’s merchandise exports fell from 15% in FY13 to 7% in FY25; the sector’s share of exports to the US slipped from 18.5% in 2012 to 11.5 today. These shifts intersect with three industry forces shaping decisions this year:
- Sustainability and provenance: Retailers increasingly prize traceability and lower carbon footprints; higher import costs raise the per-unit emphasis on certified sourcing.
- Lab-grown value migration: Rising tariffs accelerate the business case for lab-grown diamonds and cultured gemstones, which offer lower unit costs and shorter supply chains.
- Sculptural, high-value pieces: Design-led, higher-margin items with substantial heft and fewer SKUs are becoming a hedge against volume declines and tariff friction.
The immediate impact for US retailers and investors
For US buyers the effect is twofold: margin pressure and inventory risk. Higher duties compress wholesale margins on Indian-sourced pieces and force buyers to choose between absorbing costs, passing them to consumers, or re-sourcing. Retailers reliant on predictable pre-order cycles have seen order books dampened as buyers defer or downsize commitments.
Investors should note the sector-level reallocation of value. The sharp drop in volumes makes per-unit economics more important — smaller, sculptural statement pieces and certified lab-grown lines present clearer paths to preserve gross margin. At the same time, a weaker rupee had previously softened export prices; tariffs now more directly reduce realised dollar receipts for Indian suppliers, increasing credit and working-capital risk.
Practical steps for US market participants
- Reassess sourcing mixes: increase lab-grown allocations where justified by margin and lead-time benefits.
- Negotiate longer-term contracts with freight and currency clauses to stabilise landed cost.
- Audit inventory by SKU heft and margin — prioritise higher-value, lower-volume pieces that withstand duty shocks.
- Engage with suppliers and trade bodies (GJEPC) to monitor tariff appeals and compliance timelines.
CareEdge and the Gem and Jewellery Export Promotion Council (GJEPC) both flagged the slowdown; GJEPC reported a 30.57% year-on-year drop in exports in October 2025 while imports into India fell just over 19%. Industry officials attribute the slump to tariff-related uncertainty, altered pre-order timing, rising labour costs and intensified competition from alternative markets.
For US retailers and investors the immediate choice is strategic: protect margin through assortment and sourcing adjustments, or accept thinner volumes and heavier inventory. Either way, the tariff shock has crystallised a longer-term trend toward fewer, higher-value transactions and faster adoption of alternative gemstone supply chains.
Sources: CareEdge data; Gem and Jewellery Export Promotion Council (GJEPC) reports; industry interviews, October–November 2025.
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