【Surat, India】Despite Diwali, Surat’s Diamond Industry Sees Only a Faint Sparkle, Why?

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Editor’s Note

This article highlights the ongoing challenges facing Surat’s diamond industry, where even the traditional Diwali sales boost has failed to materialize amid weak global demand.

दिवाली के बावजूद सूरत के हीरा उद्योग में दिख रही है हल्की चमक, क्यों ?
Diwali Fails to Illuminate Surat’s Diamond Industry

Diwali, the festival typically associated with a surge in purchases of precious stones and jewelry, has arrived. However, this festival of lights appears unable to dispel the gloom enveloping Surat’s famed diamond industry.

This region, which cuts and polishes 80% of the world’s rough diamonds, has not witnessed any significant increase in sales ahead of Diwali, one of India’s most prominent festivals this year.

Following a sharp decline in international demand after the imposition of heavy tariffs by the US, traders had pinned their hopes on low-priced lab-grown diamonds (LGDs) and a domestic market boom ahead of the festive season. However, these prospects also seem to be dimming, pushing the already distressed diamond industry into further difficulty.

Since the implementation of the high-tariff scheme by the Donald Trump administration in August, diamond traders have received less than 50% of the usual orders for cut and polished diamonds from the US, Surat’s largest market.

Exports Plummet by More Than Half

According to data released by the Surat Diamond Association (SDA), exports of cut and polished diamonds worth ₹13.58 billion were recorded between 2022-23, which fell to ₹4.9 billion in 2024-25.

“We expected that exports of cut and polished natural diamonds would decrease after the new tariffs. Therefore, most traders had hoped for a rapid increase in domestic demand and LGD demand before Diwali.”
“Since August this year, many traders have turned to LGDs. Between August and September, small and medium traders purchased rough LGDs from large companies setting up manufacturing units for LGDs. But neither domestic demand nor LGD demand has been sufficient so far to cover the cost of transitioning to the new setup. If LGD sales do not pick up by the end of November, traders are going to face another major loss.”
Cheaper Alternatives

Khanani further explained that there are two processes for creating synthetic diamonds – Chemical Vapor Deposition (CVD) and High Pressure High Temperature (HPHT).

The machine used in the HPHT method is cheaper than the one used in the CVD method. The price of HPHT machines can range from ₹2.5 lakh to ₹70 lakh, depending on the quality of diamonds produced by the machine. However, synthetic diamonds grown in HPHT machines are more expensive than those produced in CVD machines.

“HPHT machines mimic the natural process of heat and pressure under which diamonds form on Earth, while CVD machines produce diamonds by placing a diamond seed (a small piece or powder of a natural or synthetic diamond) in a vacuum chamber filled with heated hydrogen and carbon-containing gases.”

He said that since the HPHT system is cheaper, most medium traders decided to adopt it for LGD production. However, this has provided no relief as sales so far are not even sufficient to cover the cost of the new infrastructure and training of workers, Khanani added.

Distress and Despair

At this time of the year, workers in Surat’s diamond industry would work day and night to meet the heavy demand for their products. The period between Diwali and Christmas, despite the extra work, used to be a time of joy for them, as it brought bonus wages, and managers received expensive gifts, sometimes even flats or cars.

This year, both workers and managers cannot shake off the grim thought of whether they will even have work.

Since the imposition of tariffs by the US administration in August, over one lakh jobs have been lost in Surat’s diamond sector.

A Question of Livelihood
“My grandfather came to Surat from Bhavnagar as a diamond polisher and slowly built a small polishing unit with his savings. It started as a small unit with five workers, and by 1998 when I took over the business, we had over 200 workers. There was a time when we produced heirloom gems. It was all about opulence and legacy. But for the last two years, it has just been about survival. We are now left with about 100 workers and are being forced to produce LGDs,” diamond trader Jagdishbhai Khanani told The Federal.
“When Chinese-made LGDs started gaining popularity in the late 1980s, Surat’s natural diamond traders were confident that no one would replace natural diamonds. Even in the early 2000s when some Surat traders started turning to LGDs, most of us wanted to keep alive the legacy of hand-cut and polished natural diamonds.”
“But the pandemic changed everything. Additionally, our exports have been affected since the new tariffs were implemented. Most traders hoped that switching to cheaper LGDs, especially before the festivals, would help. But this year too, there has been no significant surge in LGD demand,” he added.
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⏰ Published on: October 19, 2025