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India-US Interim Deal Cuts Diamond Tariff to 18%, Exports Fell 60% After 50% Duty

EconomyIntl. RelationsSUPPORT
Target:UPSC GS-IIIMPSCPrelims HighMains Medium
07 Feb 2026
~2 min
Source: Indian Express
Key Data:Tariff on CPDs rolled back to 18% from 50%US market accounts for 31% of India's gems and jewellery exportsExports to US dropped by 44.42% (Apr-Dec 2025)CPD exports to US fell by over 60% (USD 3,636.36 million to USD 1,450 million)April-August 2025 duties surged from zero to 10% to 50%Jewellery duties jumped from 5-7% to 55-57%
Bodies:Gems and Jewellery Export Promotion Council (GJEPC)All India Gem & Jewellery Domestic Council (GJC)Surat Diamond AssociationIndian Diamond Institute
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What This Article Covers

1.The US reduced its tariff on Indian cut and polished diamonds (CPDs) to 18% from 50% as part of an interim trade agreement, aiming to restore exports.

2.India's gems and jewellery exports to the US, its largest market, had fallen by 44.42% after duties surged last year, severely impacting Surat's industry.

3.The deal highlights the interconnectedness of global trade, where geopolitical events like sanctions on Russia's Alrosa and other conflicts disrupt supply chains and export volumes.

The Big Picture
Prelims · HighMains · Medium

The US has reduced its import duty on Indian cut and polished diamonds from 50% to 18% under a new interim trade deal. This major relief aims to revive India's diamond exports, which had plunged over 60% after punitive tariffs were imposed. For exam aspirants, this tests knowledge of India's key export sectors, international trade disputes, and economic diplomacy.

Exam Lens

Quick Exam Facts From News

New US Tariff on CPDs18% (reduced from 50%)
Export Drop (Apr-Dec 2025)Over 60% (from $3.64B to $1.45B)
US Share in India's Gems Exports31% ($9.23B in 2024-25)
Surat's Global Diamond ShareCuts 8 out of 10 diamonds worldwide

1-Minute Revision

  • ›New US Tariff on CPDs: 18% (reduced from 50%)
  • ›Export Drop (Apr-Dec 2025): Over 60% (from $3.64B to $1.45B)
  • ›Target this Data: Export drop of over 60% for CPDs to US (Apr-Dec 2025).
  • ›Target this Nodal Body: Gems and Jewellery Export Promotion Council (GJEPC).
  • ›Target this Legal Point: US Executive Order 14346 of September 5, 2025 (basis for reciprocal tariffs).

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Q1Static LinkageEasy

Which council, under the Ministry of Commerce and Industry, is the apex body for promoting India's gems and jewellery exports, as mentioned in the news?

Q2Statement-basedHard

Consider the following statements regarding the news on India-US diamond trade: 1. The US reduced its tariff on Indian cut and polished diamonds to 18% from 50% under an interim deal. 2. India's gems and jewellery exports to the UK also increased after a similar duty reduction. 3. The primary reason for the initial crisis was sanctions imposed by the US and EU on the Russian company Alrosa.

Q3Data-centricMedium

As per the article, what was the approximate percentage drop in India's export of Cut and Polished Diamonds (CPDs) to the US between April and December 2025 after the tariff hike?

Q4Application/ImpactMedium

What is a key expected outcome of the US reducing tariffs on Indian diamonds, as highlighted by industry representatives in the article?

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