Mumbai: The US President Donald Trump announced reciprocal tariffs affecting over 180 countries, including a 26% tariff on India. As a result, the market has reacted negatively.

Trump’s ‘Liberation Day’ announcements had no country-specific exclusions as he announced new tariff rates for more than 180 countries. Apart from country-specific tariffs, Trump also announced the imposition of a 10% baseline tariff.

As a result, India’s gem and jewellery sector will see a big impact because its share in Indian exports to the U.S. is high. Upto 2024, the U.S. accounted for 30% of India’s total exports in this category. India’s tariffs on gold jewellery imports (20%) are far higher than US import tariffs (5.5-7%), while the US imposes no tariffs on cut and polished diamonds vs India’s 5% import tariff.

A statement issued by India’s Gem & Jewellery Export Promotion Council (GJEPC) says, “Indian gem & jewellery industry, like the rest of the world, is trying to analyse the evolving global economic landscape due to the reciprocal tariff announcement by USA on countries worldwide. The Gem & Jewellery Export Promotion Council (GJEPC) though understands the U.S. administration’s intent to address trade and tariff imbalances through reciprocal tariffs, however urges the U.S. to uphold the spirit of the longstanding trade partnership between India and the United States, which has been built on mutual respect and shared economic interests.”

“The Trump administration’s announcement of a 26% reciprocal tariff on Indian gem and jewellery exports to the US would be a significant burden on Indian exporters and American consumers alike. While the tariff’s application to competing nations presents both challenges and opportunities, it is likely to significantly impact India’s diamond and jewellery sector—a cornerstone of its exports to the US. In the long term, we foresee a reshaping global supply chains. In short run, we anticipate challenges in sustaining India’s current export volume of USD 10 billion to the US market. We urge the Government of India to progress the Bilateral Trade Agreement between India and the US, as it would be crucial in navigating the tariff issues and securing long term interest of the sector.”

“Additionally, GJEPC is actively engaging with stakeholders to address these risks and advocate for balanced solutions that ensure continued access to the U.S. market.”

However, Mr. Trump imposed reciprocal tariffs at only half the rate other countries charge on US products. Still, this was enough to unsettle the market, as Dow Jones Futures tumbled more than 1.5 per cent after the tariff announcement.

He announced a 26% reciprocal tariff on India—half the rate India imposes on US imports. Besides, Trump announced a 25% tariff on automobile imports to the country, which is likely to impact auto stocks such as Tata Motors and Samvardhana Motherson.