The European Union’s (EU) decision to scrap import duties on Indian gems and jewellery could partly offset the impact of steep US tariffs, according to experts.
The EU currently levies import duties of 2.5-4% on finished jewellery—studded, plain, and imitation—from India, which will be eliminated under the India-EU free trade agreement (FTA) announced on Tuesday. The deal is expected to take effect from early 2027, according to trade experts.
The timeline reflects the size of the EU market and the fact that similar agreements with Australia and the United Arab Emirates took between six months and one year to take effect.
India currently enjoys a small trade advantage in gems and jewellery with the EU. Indian jewellery exports to the EU stood at $628 million in 2024, accounting for 3.78% of the bloc’s total jewellery imports of $16.63 billion.
In 2024, India's overall gems and jewellery exports, which include polished diamonds, to the bloc totalled $2.7 billion, while imports from the EU totalled $2.5 billion.
India’s exports of gems and jewellery to the US stood at $9.97 billion in 2024-25, roughly the same as the previous fiscal year. However, after the imposition of tariffs in April, gems and jewellery exports to the US fell by over 40% year-on-year to $3.54 billion by November, showed data from the commerce ministry.
A win-win
“This deal will benefit the exports of finished jewellery from India,” Kirit Bhansali, chairman of the Gem and Jewellery Export Promotion Council (GJEPC), told Mint. “It gives a great opportunity to our jewellery companies to export to the bloc and contribute to earning valuable forex.”
Bhansali expects bilateral trade in gems and jewellery with the EU to double to $10 billion over the next three years.
India’s tariffs on jewellery imports from EU nations will, however, continue at around 22%. This gives Indian jewellers a significant advantage over competitors such as Hong Kong, China, and Thailand, whose exports to the EU will continue to attract duties of 2.5-4%, Bhansali said.
Shares of jewellery companies saw a mixed reaction. Kalyan Jewellers India and Senco Gold closed up 0.5% and 0.8%, respectively, at ₹368.9 and ₹308.25, while Titan Co. ended 0.6% lower at ₹3,997.
Beyond tariff relief, industry executives said the deal could also improve acceptance of Indian studded jewellery in European markets, aided by India’s expanding global certification infrastructure.
“This is a very positive move for India, which not only has immense manufacturing capability to cater to global markets but has also enhanced its finishing standards through government-supported common facility centres (CFCs),” said Ramit Kapur, managing director of Gemological Science International (GSI).
Kapur added that the presence of global certification laboratories such as GSI in India would help authenticate studded jewellery for European buyers, improving trust and market access. “We expect studded jewellery sales to the EU to increase by at least 15% in the coming months, alongside higher employment for skilled workers,” he said.