Update on U.S. Duty Structure and Reciprocal Tariff Framework Affecting Exports to the United States

Ref.No.GJEPC/Members/USA Tariff Plan/2025-26 7th Feb 2026 To, All Members of the Council Sub :- Update on U.S. Duty Structure and Reciprocal Tariff Framework Affecting Exports to the United States Dear All, This is to inform members about recent developments concerning U.S. import duties and the evolving tariff framework impacting exports to the United States: Key Highlights:

1. Removal of additional 25% duty linked to Russian oil imports (Effective 7 February 2026) Pursuant to an Executive Order dated 6 February 2026 (enclosed), the United States has removed the additional 25% ad valorem duty linked to Russian oil imports. This rollback is effective for goods entered for consumption or withdrawn from bonded warehouse on or after 12:01 AM EST, 7 February 2026 (i.e. 10:31 AM IST, 7 February 2026). For entries on or after this time, the 25% duty does not apply; any 25% duty deposited earlier constitutes excess collection and may be eligible for refund under CBP procedures. Imports cleared prior to this date do not automatically qualify for a refund. The rollback admittedly has been carried out on the basis that India has committed to stop directly or indirectly importing Russian Federation oil.
2. US-India Joint Statement on Reciprocal Tariffs and Interim Trade Framework Under the Joint Statement (enclosed), the United States has outlined a framework for an Interim Trade Agreement, reaffirming its commitment towards a broader US–India Bilateral Trade Agreement (BTA).

nder the Joint Statement (enclosed), the United States has outlined a framework for an Interim Trade Agreement, reaffirming its commitment towards a broader US–India Bilateral Trade Agreement (BTA). The Statement indicates that a reciprocal tariff rate of 18% may be applied under this framework, but this rate is not operative yet, and its reduction will depend on the Interim Trade Agreement being concluded and implemented, followed by necessary implementing action in the U.S. (Executive Order, Federal Register notice or HTS amendment).
The Joint statement affirms that, subject to the successful conclusion of the Interim Agreement, US will remove the reciprocal tariff on a wide range of goods identified in annex III to the Potential Tariff Adjustments for Aligned Partners Annex to Executive Order14346 of September 5, 2025. Annex III includes gems and diamonds, alongside generic pharmaceuticals and aircraft parts, signalling that reciprocal tariff relief for these goods is contemplated once the Interim Trade Agreement enters into force. The Statement also covers broader tariff and market-access measures on items such as animal feed, tree nuts, fresh and processed fruits, soybean oil, wine and spirits, and notes U.S. commitments to remove certain Section 232 tariffs on Indian aircraft and aircraft parts and offer preferential tariff-rate quotas for automotive parts, subject to national security requirements.
Both countries aim to promptly implement the framework and finalise the Interim Trade Agreement en route to a mutually beneficial BTA.

tomotive parts, subject to national security requirements.
Both countries aim to promptly implement the framework and finalise the Interim Trade Agreement en route to a mutually beneficial BTA.

3. Interaction of reciprocal tariff framework with MFN duty (Illustrative impact for jewellery and castings) The reciprocal tariff operates over and above the normal MFN customs duty under the U.S. tariff schedule. For jewellery, for instance, where the MFN rate is typically 5–6%, the current effective duty incidence would be MFN duty plus the reciprocal tariff.
   Cut and polished diamonds and lab-grown diamonds carry a normal MFN duty of zero, so the 18% reciprocal tariff would be the only duty applicable once it is notified. If and when the benefits of Annex III (of the Potential Tariff Adjustments for Aligned Partners annex to Executive Order 14346) are implemented, cut and polished diamonds are expected to become fully duty-free; however, lab-grown diamonds are not included in Annex III, so they would continue to be subject solely to the 18% reciprocal tariff. Importantly, jewellery castings made in the United States and sent abroad for gem-setting or finishing remain U.S. origin and qualify for exemption under HTSUS 9802.00.50; only MFN (and no reciprocal tariff) applies on the Indian value addition, leaving the U.S.-origin casting value duty-free.
4. Summary of position as on date
    25% Russia-oil-linked duty: Already removed, effective 12:01 AM EST / 10:31 AM IST on 7 February 2026.

tion, leaving the U.S.-origin casting value duty-free. 4. Summary of position as on date
 25% Russia-oil-linked duty: Already removed, effective 12:01 AM EST / 10:31 AM IST on 7 February 2026.
 18% reciprocal tariff: Future and conditional-it will apply only after the Interim Trade Agreement is concluded and implemented, with no effective date announced. Till such time 25 percent applies, subject to admissible exemptions
 Tariff based MFN rate (5 to 6 percent) continues to apply and shall therefore be in addition to the proposed to the 18% reciprocal tariff
 Similarly, subject to the successful conclusion of the Interim Trade Agreement, the US has committed to remove reciprocal tariffs on gems and diamonds vide Annex III mechanism
Illustrative summary as under:
Item Current- 7 Feb 2026 After 18% reciprocal tariff implemented
After Annex III implemented Jewellery  Reciproc al tariff: 25%  Russia-oil duty: 0%  MFN: 6%  Total: 31%  Reciproc al tariff: 18%  Russia-oil duty: 0%  MFN: 6%  Total: 24%  Reciproc al tariff: 18%  Russia-oil duty: 0%  MFN: 6%  Total: 24%(not in Annex III)

 Total: 31%  Reciproc al tariff: 18%  Russia-oil duty: 0%  MFN: 6%  Total: 24%  Reciproc al tariff: 18%  Russia-oil duty: 0%  MFN: 6%  Total: 24%(not in Annex III)

Cut & polished diamond s (natural)  Reciproc al tariff: 25%  Russia-oil duty: 0%  MFN: 0%  Total: 25%  Reciproc al tariff: 18%  Russia-oil duty: 0%  MFN: 0%  Total: 18%  0% (fully exempt) Lab- grown diamond s  Reciproc al tariff: 25%  Russia-oil duty: 0%  MFN: 0%  Total: 25%  Reciproc al tariff: 18%  Russia-oil duty: 0%  MFN: 0%  Total: 18%  Reciproc al tariff: 18%  Russia-oil duty: 0%  MFN: 0%  Total: 18% (not in Annex III)

Members are advised to monitor developments closely, as implementation timelines and tariff structures remain subject to formal notifications and regulatory action in the United States. The Council will continue to keep members informed of further developments. For any clarification, members may contact the Council. Thanking you, With best regards, Sd/- SABYASACHI RAY EXECUTIVE DIRECTOR Encl:-

1. Russian Oil Tariff Order : Click Here
2. India – US Joint Statement Click Here