Calm After the Tariff Storm

The diamond industry breathed a collective sigh of relief after the US and India reached a trade deal that will eliminate import duties on India-sourced diamonds and gemstones.

By way of recap, in September President Trump imposed a 25% reciprocal tariff, followed by an additional 25% penalty on all Indian imports, aimed at pressuring India to halt purchases of Russian oil. The impact was immediate and severe. India’s diamond trade was put at a massive disadvantage, with goods suddenly costing up to 50% more than those of competing suppliers.

Under the new agreement, India committed to stopping purchases of Russian oil. In return, the US scrapped the 25% penalty, reduced the reciprocal tariff to 18%, and will remove the reciprocal duty altogether on select items, including gems and diamonds.

This follows two other significant developments. First, the US and the European Union agreed to eliminate tariffs on EU-sourced diamond imports into the US. Second, India and the Europeans concluded a trade deal under which the EU abolished import duties on Indian gem and jewelry products, while India will lower its duty on EU polished imports from 5.5% to 2.5%.

To state the obvious, these agreements are a boon for India’s influential diamond trade, restoring their competitive edge. And they provide a meaningful boost for US jewelers. Tariffs had effectively choked off supply from the world’s dominant diamond manufacturing center. With that barrier removed, US jewelers may be more willing to resume buying and place polished orders with far less hesitation.

Another notable development came with President Trump’s decision to extend the African Growth and Opportunity Act (AGOA) to December 31, 2026. AGOA is a trade preference program that grants eligible sub-Saharan African countries duty-free access to the US market for more than 1,800 products.

Diamonds are listed among eligible products on the AGOA website, but it remains unclear whether they are exempt from the 15% reciprocal tariffs currently applied to Angola, Botswana, Lesotho, and Namibia, and the 30% on South Africa.

Sources said clarification was still being sought at press time.

If confirmed, such exemptions would further level the playing field, effectively bringing zero duties across the major polishing centers in India, Belgium, and southern Africa. That would allow diamantaires to sell into the world’s largest diamond jewelry market without trade barriers.

That outcome is what the industry has been pushing for all along. It took considerable disruption to get here, and perhaps it came via a less desirable and unexpected path, but the end of the tariff storm finally appears within reach.

Image: India's Prime Minister Narendra Modi with US President Donald Trump at The White House in February 2025 (The White House)