【Surat, Gujar】Why Surat Diamond Industry is Seeing Little Sparkle Ahead of Diwali

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Editor’s Note

This article examines the subdued pre-Diwali season in Surat, the global hub for diamond polishing. Despite the festival’s traditional association with jewellery purchases, the industry faces significant headwinds from weak international demand.

Surat diamond traders Diwali celebrations
Festival Gloom in the Diamond City

Diwali, the festival that typically sees a boost in purchases of precious stones and jewellery, is almost here. However, it seems the festival of light is unable to eradicate the darkness prevalent in Surat’s famous diamond industry.

The sector, which accounts for the cutting and polishing of 80 per cent of the world’s rough diamonds, has not witnessed any significant rise in sales ahead of one of India’s most prominent festivities this year.

With international demand plummeting after the US imposed steep tariffs, traders had pinned their hopes on the less expensive lab-grown diamonds (LGD) and a surge in the domestic market ahead of the festive season. But even those possibilities have looked dim, leaving an already distressed diamond industry in the lurch.

Exports Fall by More Than Half

Diamond traders have received less than 50 per cent of the usual order of cut-and-polished diamonds from the US — the largest market for Surat diamonds — since the Donald Trump administration implemented the high tariff plan in August.

As per data released by the Surat Diamond Association (SDA), while cut-and-polished diamonds worth Rs 13.58 billion were exported in 2022-23, the figure plunged to Rs 4.9 billion in 2024-25.

“We had expected the exports of cut-and-polished natural diamonds to go down after the new tariff. Hence, a majority of traders had pinned their hopes on a surge in domestic demand and a surge in demand for LGD ahead of Diwali,” Dharmesh Kanani, a diamond trader from Surat, told The Federal.
“Since August this year, many traders have made a switch to LGD. Between August and September, small and medium traders bought rough LGD from larger companies that set up manufacturing units for LGD. But neither the domestic demand nor the demand for LGD has been enough so far to compensate for the cost of switching to a new setup. Unless the LGD sale boosts by the end of November, the traders are staring at another major loss,” he added.
Cheaper Options

Kanani further explained that there are two processes to make synthetic diamonds — Chemical Vapor Deposition (CVD) and High Pressure High Temperature (HPHT).

“The machine used in the HPHT method is cheaper than the machine used in the CVD method. The HPHT machines can cost between Rs 2.5 lakh and Rs 70 lakh, depending upon the quality of the diamonds a machine can produce. But, synthetic diamonds grown in HPHT machines are costlier than those made in CVD machines,” said Kanani.

Since the imposition of tariffs by the US administration in August, more than one lakh jobs have already vanished in Surat’s diamond sector.

“The HPHT machines mimic the natural process of heat and pressure under which diamonds are formed on earth while the CVD machines produce diamonds by placing a diamond seed (a small slice or powder of natural or synthetic diamond) in a vacuum chamber filled with heated hydrogen and carbon-containing gases,” Kanani, who expanded into LGD manufacturing in late August, told the publication.

He said that since the HPHT set-up is cheaper, most of the medium traders decided to switch to it to produce LGD. However, it has not brought them any relief as the sales so far have not been enough to even compensate for the new setup and the cost of training the workers, Kanani added.

Doom and Gloom

The overall sentiment in Surat’s diamond industry remains one of despair, with the festive season failing to deliver the anticipated sparkle.

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⏰ Published on: October 19, 2025