The United States has imposed a 10% additional tariff on Indian exports under its new Section 301 forced-labour regime, placing immediate pressure on the country's gems and jewellery sector.
The measure exacerbates existing trade headwinds for Indian exporters, who now face a widening competitive disadvantage against Asian rivals that retain duty-free access to the US market for diamonds and finished jewellery.
This development marks a significant escalation in the Trump administration's trade policy toward India, extending beyond the textile sector which has already been hit by new duties.
While the Federation of Indian Export Organisations (FIEO) previously stated that India's broader export sector was largely insulated from the latest wave of Section 301 tariffs, the specific targeting of gems and jewellery suggests a more granular and aggressive approach to trade enforcement.
The industry, which relies heavily on US demand for high-value finished products, now faces a direct cost penalty that could dampen margins and volume.
The competitive landscape is shifting rapidly.