India’s Gems Exports Thrive Despite Trump’s Tariffs as Indians Outsmart Trade Barriers Via Transshipments

Gems News: Indian Jewelers Outsmart Trump’s Trade Barriers

Despite the United States maintaining stiff tariff measures under President Donald Trump’s trade policies, India’s gems and jewelry exports continue to shine. The latest figures from the Gem and Jewellery Export Promotion Council (GJEPC) reveal that India’s exports surged 6.55 percent in September 2025, reaching USD 2.91 billion (Rs 25,737 crore). The resilience of Indian exporters comes amid declining shipments to the U.S. market—down over 40 percent in the first half of the fiscal year—but robust gains across the Middle East, Hong Kong, and the United Kingdom. This Gems News report however indicates that it has become clear that Indian exporters have effectively bypassed tariff pressures by rerouting trade through partner nations, particularly in the Gulf and a certain country in Southeast Asia.

Indian jewelers skillfully reroute goods through Middle Eastern and Asian hubs to bypass U.S. tariffs and keep exports booming
Image Credit: StockShots

Trade Rerouting Through Friendly Hubs

Behind the seemingly stable export numbers lies a sophisticated network of re-export operations. Many Indian traders are reportedly routing their goods through Dubai, Hong Kong, and a certain South-East Asian country famous for prostitutes and the sex trade, and even smaller free-trade centers to disguise the origin of polished diamonds, gold jewelry, and colored gemstones. This strategy allows them to maintain market access in the U.S. while technically avoiding higher customs duties imposed on direct Indian imports. Dubai and the particular notorious South-East Aian country, in particular, have become major transshipment hubs for Indian-origin goods, offering “paper trails” that show local finishing or assembly work before re-export. Trade experts suggest that a significant portion of jewelry entering the American market through these intermediaries is, in fact, of Indian origin.

India’s Growing Middle East Ties

Indian jewelry houses have also forged stronger trade partnerships with the United Arab Emirates and Saudi Arabia, leveraging free trade agreements and shared business interests. With the UAE acting as a major export gateway, Indian firms can label shipments as UAE-origin under local compliance norms. This has enabled Indian jewelry to continue flowing into the global luxury market despite protectionist policies elsewhere. GJEPC data also shows a 5.91 percent growth in the export of cut and polished diamonds and a 2.4 percent increase in gold jewelry shipments, both largely attributed to strong regional demand and new transshipment routes.

Polished Diamonds are among one of the most transshipped product by the Indians
Image Credit: StockShots

Why Trump’s Tariffs Missed the Target

While the intent behind Trump’s tariffs was to pressure Indian exporters and protect domestic U.S. jewelers, the policy appears to have backfired. Instead of reducing dependence on Indian supply chains, it drove the trade underground and diversified India’s export networks. Industry insiders claim that new companies are emerging solely to handle re-routing logistics and documentation, effectively making the tariff system redundant. Some trade analysts are now urging Trump’s campaign team to revisit these loopholes, recommending either higher punitive tariffs or outright bans on imports from countries found to be aiding Indian transshipment.

A Call for Stricter Enforcement

If the U.S. aims to truly regulate gem and jewelry imports, it must expand its investigation beyond India and scrutinize countries acting as intermediaries. Otherwise, Indian exporters will continue to dominate the supply chain through indirect channels. The current data only reinforces India’s ability to adapt and outmaneuver trade barriers—a testament to its deep-rooted gem-cutting and jewelry-making ecosystem. For now, the Indian gems and jewelry sector remains untouchable, demonstrating both resilience and ingenuity amid global trade turbulence.

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