Gems, diamonds, and aircraft parts lead $44 billion zero-duty exports as India-US trade framework takes shape

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• India's zero-duty exports to US rise to $44 billion under new trade framework
• Gems, diamonds, aircraft parts, and pharma now included in zero-duty list
• Sensitive farm items excluded to protect Indian farmers

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Gems, diamonds, and aircraft parts are set to lead India’s $44 billion worth of exports entering the United States at zero duty under the interim India-US trade framework, government sources said.

Of this total, exports worth $30 billion were already entering the US market without duties, while an incremental $14 billion has now been added to the zero-duty basket.

Overview of zero-duty exports

The $44 billion zero-duty figure is part of India’s overall exports of $86.51 billion to the United States in FY25.

Electronics and generic drugs were among the categories that already enjoyed zero duty earlier, accounting for a large share of the $30 billion that was duty-free even before the new framework.

The additional $14 billion now brings more products into the zero-duty ambit.

Key sectors benefiting from zero duty

Addressing a press conference, Union Commerce and Industry Minister Piyush Goyal said several high-value sectors would benefit. “There are several items on which zero duty will now be levied when our exporters send goods to the United States of America,” he said.

“For example, zero duty will be applied to gems and diamonds. Pharmaceutical products, which are exported from India in large quantities, will also be subject to zero duty. Smartphones, which are exported from India to the US in large numbers, will continue to have zero duty.”

Apart from gems and diamonds and aircraft parts, the zero-duty list includes machinery parts, generic drugs, pharma products, some auto parts, platinum, clocks and watches, essential oils, and home décor items such as chandeliers and lamp parts. Certain inorganic chemicals, along with select paper, plastic and wood items, are also covered.

Agricultural exports and safeguards

Goyal said several agricultural exports will now attract zero duty from earlier levels of up to 50%.

These include spices, tea, coffee, copra, coconuts and coconut oil, vegetable oil and wax, areca nut, Brazil nuts, cashew nuts, chestnuts, and fruits and vegetables such as avocados, bananas, guavas, mangoes, kiwis, papaya and mushrooms, along with barley and some processed foods.

At the same time, he stressed that sensitive farm items were excluded. “We have not included any item where any Indian farmer will be hurt. All sensitive items have been kept out of the deal,” he said, adding, “No GM items will enter India, no relief on meat, poultry, dairy, soybean, maize, rice, wheat, sugar, millets, fruits such as bananas, strawberries, cherries, citrus fruit, greenpea, kabuli chana, moong, oilseeds, ethanol, tobacco.”

India-US trade and tariff structure

Trade data shows that in FY25, India imported $45.62 billion worth of goods from the United States, while exports to the US stood at $86.51 billion. Under the framework announced earlier this week, Washington has lowered tariffs on Indian goods to 18% from the 50% imposed in August 2025.

US President Donald Trump said India would buy over $500 billion worth of American energy, technology, agricultural products, and coal, among other items.

According to the joint statement, the 18% reciprocal tariff will apply to categories such as textiles and apparel, leather and footwear, plastic and rubber, organic chemicals, home décor, artisanal products, and certain machinery.

Subject to the successful conclusion of the interim agreement, the US will remove reciprocal tariffs on a wide range of goods identified for aligned partners, including generic pharmaceuticals, gems and diamonds, and aircraft parts.

Industry response

Welcoming the framework, Kirit Bhansali, Chairman of the Gems and Jewellery Export Promotion Council, said the agreement would provide relief to a sector that had faced high tariffs over the past year, noting that the US remains the most critical market for Indian gems and jewellery exports.