Editor’s Note
This article examines how U.S. tariffs, originally aimed at Chinese goods, have inadvertently strained Gujarat’s vital diamond industry by increasing costs and disrupting supply chains for local manufacturers.
The diamond industry in Gujarat, particularly in centers like Surat, has faced significant challenges due to the imposition of Trump-era tariffs. The tariffs, primarily targeting Chinese goods, have disrupted global supply chains and increased the cost of machinery and raw materials essential for diamond cutting and polishing. This has squeezed profit margins for many small and medium-sized enterprises (SMEs) in the region, forcing some to scale back operations or seek alternative, often more expensive, suppliers.
Rajasthan’s gemstone trade, centered in Jaipur, has also been affected. The tariffs have led to increased costs for imported rough gemstones and specialized equipment. Furthermore, uncertainty in trade policies has made long-term planning difficult for exporters. A key industry representative commented on the situation:
In response, some businesses have begun diversifying their supply chains away from tariff-affected countries and exploring new markets in Asia and the Middle East. There is also a growing push towards value addition within India to reduce dependency on imported processed materials. However, the full long-term impact on these traditional Indian industries remains a subject of close monitoring by trade bodies and the government.