【Surat, India】Embattled Diamond Industry Stares at Deeper Crisis with 25% Tariff

Editor’s Note

This article highlights the mounting pressures on Surat’s diamond industry, a critical export hub. While the potential impact of new US tariffs is a significant concern, the sector was already grappling with a complex web of challenges, from global demand shifts to supply chain disruptions. The story underscores how local economies are often caught in the crosscurrents of international trade and geopolitics.

Embattled diamond industry stares at deeper crisis with 25% tariff
Industry in Peril

Surat: US President Donald Trump’s imposition of a 25% tariff on Indian goods is feared to inflict a crippling blow to Surat’s famed diamond cutting and polishing industry, which is already struggling to keep its head above water due to falling demand, declining polished diamond prices, sanctions on Russian roughs, and the rise of cheaper alternatives.

Exports of natural cut and polished diamonds (CPD) have already fallen sharply — from $23.8 billion in 2018-19, the pre-Covid year, to $13.2 billion in 2024-25. While the market had shown signs of stabilising in recent months, industry players fear that the new tariff will further deepen the crisis. Nearly 30% of India’s natural CPD exports — worth around $4 billion — are shipped to the US in the form of loose gems and studded jewellery.

Official Concern
“The sweeping 25% tariff on all Indian goods, along with vague penalties affecting strategic ties, is a deeply concerning development. If implemented, this move could have far-reaching repercussions across India’s economy, disrupting critical supply chains, stalling exports, and threatening thousands of livelihoods,” said Kirit Bhansali, chairman of the Gem and Jewellery Export Promotion Council (GJEPC).
“The Indian gem and jewellery sector, in particular, stands to be severely impacted. The US is our single largest market, accounting for over $10 billion in exports — nearly 30% of our industry’s total global trade. A blanket tariff of this magnitude will inflate costs, delay shipments, distort pricing, and place immense pressure on every part of the value chain — from small artisans to large manufacturers,” he added.
Recovery Hopes Dashed
“We were hopeful of a recovery this festive season. But if the new tariff takes effect, it will severely impact the industry,” said Vipul Shah, former GJEPC chairman and a diamantaire.

The majority of around 5,000 small and medium diamond CPD units have reduced working hours due to the slowdown in the last three years. As the natural diamond market stabilises and lab-grown diamonds (LGD) polishing gains momentum, the industry had started to provide full-time employment.

The CPD sector employs about 1.2 million workers, and the state government recently announced a relief package for the struggling industry. The package includes Rs 13,500 in school fee support per child for jobless artisans, an interest subsidy on loans, and a waiver of electricity duty.

Local Impact
“In this scenario, fresh orders and supply to the US will slow down drastically. Local buying has already stopped, and manufacturing will be hit severely if the tariff is not withdrawn,” said Jagdish Khunt, president of the Surat Diamond Association.
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⏰ Published on: August 01, 2025