Jewellery Stocks Surge as India-US Deal Slashes Tariffs

Introduction: Trade Deal Sparks Sector-Wide Rally

The Indian stock market witnessed a significant rally in gems and jewellery stocks on February 9, 2026. This surge was a direct response to the announcement of a framework for an interim trade agreement between India and the United States. The deal, confirmed on February 6, includes a pivotal provision to slash US reciprocal tariffs on Indian exports of gems and diamonds to zero, providing a major boost to the export-oriented sector.

Market Reaction: Investors Cheer Tariff Removal

Investor sentiment turned overwhelmingly positive following the news, leading to sharp gains across the board for jewellery companies. The market reaction underscores the importance of the US market for these firms and the relief felt from the removal of tariff barriers. The trading volumes for these stocks were notably high, indicating strong investor interest and a belief in the sector's improved prospects.

Goldiam International was a standout performer, with its shares soaring more than 17 percent to close at Rs 428.75. Kalyan Jewellers India also saw a substantial jump of over 16 percent, reaching Rs 442.95, a move also supported by its strong third-quarter financial results. Other companies in the sector posted impressive gains, reflecting a broad-based optimism that swept through the market.

Key Stock Movements

The positive momentum was not limited to a few names. Rajesh Exports jumped 5 percent, hitting its upper circuit limit. Tribhovandas Bhimji Zaveri shares rallied over 7 percent, while Senco Gold gained more than 8 percent. Even large-cap player Titan Company saw its shares climb 3 percent, trading near its record high. Thangamayil Jewellery also participated in the rally, with its stock rising over 9 percent. This widespread rally highlights the collective impact of the trade deal on the entire industry.

Details of the India-US Trade Framework

The framework for the interim agreement was officially released on February 6, marking a significant step in the ongoing bilateral trade negotiations launched in February 2025. A joint statement from both countries described the agreement as a "historic milestone" that demonstrates a shared commitment to reciprocal and balanced trade. The primary objective is to enhance market access and build more resilient supply chains between the two nations.

According to the framework, the US has agreed to remove its reciprocal tariffs on several key Indian exports, including gems and diamonds, generic pharmaceuticals, and aircraft parts. This move is subject to the successful finalization of the Interim Agreement. The elimination of these tariffs is expected to significantly lower costs for US importers and, in turn, boost demand for Indian products.

Reversing a Troubling Export Trend

The timing of this agreement is critical. The Indian gems and jewellery sector had been facing considerable headwinds, with exports to the US contracting by 44.42% year-on-year to $1.86 billion during the April-December 2025 period. The US market is indispensable for the industry, accounting for approximately 30% of India's total gem and jewellery sales. The high tariffs had made Indian products less competitive, and the new deal is seen as a lifeline that could reverse this decline and pave the way for a strong export recovery.

Analyst Commentary and Broader Impact

Market analysts and industry experts have responded positively to the development. Anitha Rangan, Chief Economist at RBL Bank, noted that labour-intensive sectors such as textiles, gems and jewellery, and leather goods stand to benefit the most. She described the deal, along with a potential EU agreement, as a "double positive" that opens up new avenues for export expansion. The consensus is that the removal of this major tariff overhang will improve profitability and restore confidence among exporters.

Future Outlook

The long-term outlook for the gems and jewellery sector has improved substantially with this trade agreement. The focus will now shift to the swift implementation of the framework. While the deal provides a significant strategic advantage, the sector's sustained growth will also depend on factors like the recovery of US consumer spending and the overall global economic environment. However, the elimination of tariffs on key exports to its largest market provides Indian jewellery companies with a clear and positive path forward, invigorating a sector crucial to India's economy and employment.