Trump Slashes Tariffs on India to 18%
February 03, 26
(IDEX Online) - US president Donald Trump yesterday (2 February) said he would slash tariffs on Indian imports from 50 per cent to 18 per cent as part of a new trade deal.
The move was announced in a Truth Social post, which indicated it was in response to India's agreement to stop buying Russian oil.
India's Gem and Jewellery Export Promotion Council (GJEPC) described it as a "vital relief measure" that would deliver a much-needed boost to the industry.
The country's diamond exports to the US, which account for up to 40 per cent of its total polished diamond shipments, have plummeted since the US tariffs came into effect in August 2025.
Trump imposed a 25 per cent reciprocal tariff - which he described as a response to India's high tariffs on US imports.
He went on to impose an additional 25 per cent tariff to punish India for its continued oil purchases from Russia.
Trump's social media post has yet to be confirmed by the White House, but India's prime minister Narendra Modi posted a message of thanks on X, describing it as an "opportunity unlocker".
He said: "Delighted that Made in India products will now have a reduced tariff of 18%. Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement."
Trump explained in the post that Modi had "agreed to stop buying Russian Oil, and to buy much more from the United States and, potentially, Venezuela. This will help END THE WAR in Ukraine."
He went on to say: "Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%."
He did not explicitly state that he was withdrawing the punitive element, but that is widely understood to be case, given his comments on Russian oil.
Polished diamonds from India had entered the US duty-free for decades before Trump's "Liberation Day" speech in April 2025. So the industry is still being hit hard, albeit less hard.
As part of the trade deal, India has agreed to lower its own tariffs and non-tariff barriers on US goods to zero over time, plus commitments to buy $500bn in US products.
Kirit Bhansali, GJEPC chairman, said he hoped the trade deal would lead, in time, to zero duty on loose diamonds and colored gemstone imports from India.