Editor’s Note
India’s diamond industry, which polishes over 80% of the world’s rough diamonds, faces significant uncertainty due to new U.S. tariffs. This policy, imposing duties of 27% on Indian-cut diamonds, is disrupting the global supply chain from mines to retailers.
More than 80% of the world’s rough diamonds are polished in India, a country now facing the impact of the new US customs policy. With the imposition of new tariffs, the entire supply chain, from mining companies to jewelers, is plunged into uncertainty.
Other stones cut in India enter the United States simply to be analyzed and certified before being shipped back to their diamond dealer and sold on another market. The most reputable laboratory in this field is the Gemological Institute of America (GIA). Even these stones, which are not intended for sale on US soil, are subject to the tariffs. However, as the regulation is not yet very clear, the expertise center wrote to foreign diamond dealers in early April advising them to stop sending stones for analysis until the situation clarifies.
Diamonds are India’s third-largest export product to the United States. In the short term, job losses are inevitable, estimates the president of the Indian Diamond Institute, based in Surat, the Indian capital of this industry where a diamond exchange was inaugurated in 2023. India hopes to neutralize these new tariffs. The authorities have not yet taken retaliatory measures. They are prioritizing the negotiation of a bilateral trade agreement, which could be concluded within a few months.
At every stage, from extraction to the sale of diamonds, uncertainty prevails. This is exemplified by a measure taken by a mining operator, who just announced on Monday, April 7, the cancellation of an auction scheduled for this week.
The United States buys half of the diamonds sold worldwide, and it was thanks to them that consumption had rebounded before the Christmas holidays. If Americans buy fewer precious stones, we could see mining companies in Botswana, or perhaps Namibia, ease off and produce less, to avoid flooding the market and risking a price drop. No country will be able, through its demand for diamonds, to compensate for a potential paralysis of the US market. Moreover, buyers who can afford to give diamonds are also often those who have invested in financial markets and are now very worried about the global economic situation, notes an industry expert.
