Editor’s Note
The global diamond trade faces new pressures as U.S. tariff policies ripple through supply chains. This report examines the human and economic impact on Surat, India—a hub that polishes over 90% of the world’s diamonds—where livelihoods now hang in the balance.
Surat, India, known as the world’s “Diamond City,” has been overshadowed by the tariff policies of the US Trump administration. In late August this year, the Trump administration imposed a 50% tariff on India, the highest tariff rate globally at the time. Now, the city’s large and small-to-medium enterprises, employing 1 million workers, face the risk of unemployment, raising serious concerns.
Surat, a city of 6 million people in Gujarat, western India, is known as the world’s “Diamond City,” processing 90% of the world’s diamonds. Rough diamonds from Africa and other countries are cut and polished here before being exported worldwide. The United States is the largest export destination, accounting for 30% of the total volume.
On August 27, the Trump administration imposed a 25% tariff on India as a “punishment” for India’s reciprocal 25% tariff. India imports large quantities of crude oil from Russia, which continues its invasion of Ukraine.
In the bustling city center, cars, motorcycles, and auto-rickshows honk incessantly on narrow streets lined with diamond polishing and jewelry factories. In alley markets, vendors display diamonds on small tables. The diamond and jewelry industry is a vital local sector, employing approximately one million people.
Since the COVID-19 pandemic, diamond demand has plummeted, and prices have fallen. Furthermore, due to economic sanctions following the war in Ukraine, Russian rough diamonds now have to be imported via Dubai and other channels, leading to increased costs.
Additionally, the world’s highest tariff of 50% has also dealt a heavy blow to Russia, causing exports to the US to stagnate. The association, with about 6,000 member companies, fears this will undoubtedly be a major blow, especially for small factories.
As the diamond industry faces turbulent times, including weak demand, falling prices, and a ban on importing rough diamonds from Russia, an increasing number of companies are expanding their diamond businesses from “single operations” to manufacturing jewelry such as rings and necklaces.
At Kakadiya’s headquarters, about 2,700 employees work in 24-hour shifts, starting at 8 AM and ending at 8 PM. Every process takes place within a large building, and employees undergo facial recognition checks at the entrance before entering the work area.
The Trump administration’s “America First” policy and the Indian Modi government’s “Make in India” policy aim to promote manufacturing development. However, cooperation between the two major powers has stalled as their flagship policies clash.