Editor’s Note
This article highlights the immediate impact of new US tariffs on India’s diamond industry, focusing on Surat’s exporters. With the crucial Christmas season approaching, these measures threaten a significant portion of annual revenue, underscoring how trade policy shifts can disrupt global supply chains with real-time consequences for local businesses.
Diamond companies in Surat were compelled to put on hold orders they had already started receiving for Christmas from American clients when US President Donald Trump announced the additional 25% tariff on India. It came as a jolt because Christmas is just five months away, and sales during this festive season account for nearly half the total sale during a year in the international markets.
Experts anticipate that exports of non-industrial diamonds — diamonds suitable for jewellery or investment — to the US would be hit because of the extra tariffs. India accounted for 68% in volume and 42% in value ($5.79 billion) of the US’s total diamond imports in 2024, as per data from the Gems & Jewellery Export Promotion Council (GJEPC).
The second highest value of diamond imports into the US, 28% in value, was from Israel, on which Trump has imposed only 19% tariff.
Hitesh Patel, director of Surat-based Dharmanandan Diamonds Pvt Ltd, which has a turnover of around Rs 7,000 crore, said exports to the US have already dropped 25% over the last couple of years, and the production in the factories has fallen 30-35 per cent.
Patel, whose company had made news when it bought the monogrammed suit worn by Prime Minister Narendra Modi in his meeting with former US President Barack Obama for Rs 4.31 crore in 2015, said,
National chairman of the GJEPC, Kirit Bhansali, said the imposition of high tariffs and the significant reduction in exports in the Indian gems and jewellery sector will hit Surat and Mumbai the hardest.
The export of cut and polished diamonds (CPD) to the US has seen a steady drop to USD 4.81 billion in 2024-25 from USD 9.86 billion in 2021-22. The US is the largest export market, accounting for nearly a third of India’s annual gems and jewellery exports.
The GJEPC, in a July 10 letter to the Commerce Ministry, said that in June this year, the provisional gross export of CPD declined by 23.49% in dollar terms, while that of lab-grown diamonds (LGD) dropped by 24.95%, when compared to the same period last year.
