US-India Trade Deal: Zero Tariff on Natural Diamonds
The US-India interim trade framework eliminates import tariffs on loose natural diamonds and colored gemstones from India; finished diamond jewelry set at 18%.
Read original on RapaportExecutive Summary
In February 2026, the United States and India finalized an interim trade framework reducing reciprocal tariffs on Indian goods from 50% to 18%. Under the agreement, loose natural diamonds and colored gemstones imported into the US from India will face a 0% tariff — a full elimination. Finished diamond jewelry and lab-grown diamonds will be subject to an 18% rate. The framework still requires formal ratification to take full legal effect, but market participants are already treating the zero-duty commitment as operative guidance for procurement and pricing decisions.
Industry Impact
The tariff elimination materially improves the economics of sourcing Indian-polished natural diamonds for US-facing programs. The prior tariff burden — however modest on a per-carat basis — created friction and uncertainty that contributed to demand suppression. Zero duty on loose naturals, combined with the 18% rate on finished jewelry, creates a structural incentive to import polished goods and set them domestically, which may benefit US-based manufacturers and brands at the expense of fully finished import programs. The 18% rate on lab-grown diamonds is a meaningful detail: it introduces a cost differential that modestly disadvantages lab-grown in the US market relative to natural polished goods.
Next Steps
Recalibrate landed-cost models for Indian-polished natural diamonds to reflect zero duty. Revisit sourcing decisions that were deferred due to tariff uncertainty. Assess whether the 18% lab-grown rate creates a competitive pricing window for natural goods in the sub-$5,000 retail segment. Monitor formal ratification timeline via GJEPC and JCK press.