India's gems and jewellery industry, valued at $32 billion, is preparing for a significant drop in exports due to substantial U.S. tariffs hindering sales to its primary market, according to industry sources. The United States imposed a 26% reciprocal tariff on India, dashing hopes for trade relief under President Donald Trump’s policies. Colin Shah, the managing director of Kama Jewelry, expressed concern over the high tariff's impact on exports, highlighting its severity. India is a major global center for diamond cutting and polishing, processing nine out of ten diamonds worldwide. Around 30.4% of India's annual gems and jewellery exports of $32 billion go to the United States, making it the third-largest export category after engineering and electronic goods. The industry, a significant employer in India, has already faced challenges with decreased demand from China resulting in a 14.5% drop in exports in the 2023-24 fiscal year. A potential trade deal with the U.S. could alleviate the situation, with ongoing discussions aiming for an agreement in the coming months, according to industry leaders.