EU Trade Pact Sparks Major Boost for Indian Jewelry Exports

Gems News: A Long-Awaited Breakthrough for Indian Jewelers

India’s gem and jewelry sector is set for a significant turnaround following confirmation that the European Union will abolish tariffs on finished jewelry imports from India under a newly agreed free-trade agreement. For years, duties ranging from 2% to 4% had weakened India’s competitiveness in Europe, allowing rival exporting nations to gain ground. With Europe remaining one of India’s most valuable destinations for jewelry, the removal of these barriers is being widely welcomed across the industry.

According to an Indian government factsheet released this week, gems and jewelry are among the product categories that will enjoy zero-duty access once the agreement clears all procedural requirements. Industry officials say this shift could quickly reshape trade flows, particularly for value-added jewelry products.

What the Agreement Changes on the Ground

The new framework eliminates tariffs on finished jewelry, while loose rough and polished diamonds and gemstones from India already enter the EU without duties. Sabyasachi Ray, executive director of the Gem & Jewellery Export Promotion Council, noted that this Gems News report reflects a long-standing industry demand finally being met, opening the door for a stronger European presence for Indian brands.

GJEPC chairman Kirit Bhansali highlighted that zero-duty access to the world’s largest consumer market will empower export hubs in Gujarat, Rajasthan, Maharashtra, and West Bengal. These regions are expected to increase shipments of plain and studded precious jewelry, silver pieces, and imitation jewelry, leveraging India’s globally recognized design strengths. The timing is critical, especially as Indian jewelry exports to the United States have seen a sharp decline, making diversification essential.

Reciprocal Concessions and Remaining Barriers

In return, India has agreed to reduce tariffs on polished diamonds imported from the EU, including Belgium, from 5.5% to 2.5%. The same reduced rate will apply to loose-gemstones. However, India’s existing 20% import duty on finished jewelry from the EU is expected to remain largely unchanged or see only a modest reduction, preserving some protection for domestic manufacturers.

Implementation Timeline and Market Impact

The agreement is not yet in force and still requires legal revisions, translations into all official EU languages, and approvals from the European Council and European Parliament. India must also complete its own ratification process. Despite this, expectations are already building. In 2024, India’s gem and jewelry exports to the EU totaled $2.7 billion, though finished jewelry accounted for only $628 million, a figure widely attributed to tariff pressures.

Looking Beyond Europe

While the deal excludes the UK and Switzerland, both already have separate trade agreements with India. The industry is now closely watching developments with the United States, where high tariffs continue to weigh heavily on Indian exporters. This EU agreement, however, marks a decisive step toward reducing reliance on any single market and strengthening India’s global jewelry footprint in the years ahead.

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