Mumbai: A recent U.S. federal court ruling has provided significant relief to Indian jewellery exporters by blocking the implementation of the Trump administration’s proposed “Liberation Day” tariffs. These tariffs included a 26% duty on Indian gems and jewellery exports to the U.S., which posed a substantial threat to India’s $10 billion annual jewellery trade with the United States.

Key Developments:

• Court Ruling: On May 29, 2025, the U.S. Court of International Trade determined that President Trump exceeded his authority by invoking emergency powers to impose broad tariffs. The court emphasized that only Congress has the constitutional authority to regulate international commerce, thereby invalidating the executive orders that introduced the tariffs.
• Immediate Impact: The ruling halted the enforcement of the additional 26% tariffs, which had already led to a significant decline in orders for Indian jewellery exporters. This decision offers a temporary reprieve, allowing exporters to stabilize operations and strategize for the future.
• Market Response: The Indian stock market responded positively to the legal clarity provided by the court’s decision. Equities opened higher, reflecting investor optimism about the potential easing of trade tensions between the U.S. and India.

India is actively seeking a complete exemption from the 26% tariff through an interim trade deal with the U.S., aiming to finalize the agreement before the July 9 deadline. The U.S., in turn, is advocating for concessions from India, including tariff reductions on products like electric vehicles, wines, and apples.

While the court’s decision offers immediate relief, the situation remains dynamic. The Trump administration has filed an appeal against the ruling, and a federal appeals court has temporarily reinstated the tariffs pending further legal proceedings. The outcome of these legal challenges, along with ongoing trade negotiations, will be pivotal in determining the long-term stability and growth prospects of India’s jewellery export sector.

Indian exporters and policymakers are closely monitoring developments, recognizing that the final resolution will significantly impact the future of U.S.-India trade relations and the health of the jewellery export industry.