Editor’s Note
This article highlights the mounting pressures on Surat’s diamond industry, a critical export hub. While the potential impact of new US tariffs is a significant concern, the sector was already grappling with a complex web of challenges, from global demand shifts to supply chain disruptions. The story underscores how local economies are often caught in the crosscurrents of international trade and geopolitics.
Surat: US President Donald Trump’s imposition of a 25% tariff on Indian goods is feared to inflict a crippling blow to Surat’s famed diamond cutting and polishing industry, which is already struggling to keep its head above water due to falling demand, declining polished diamond prices, sanctions on Russian roughs, and the rise of cheaper alternatives.
Exports of natural cut and polished diamonds (CPD) have already fallen sharply — from $23.8 billion in 2018-19, the pre-Covid year, to $13.2 billion in 2024-25. While the market had shown signs of stabilising in recent months, industry players fear that the new tariff will further deepen the crisis. Nearly 30% of India’s natural CPD exports — worth around $4 billion — are shipped to the US in the form of loose gems and studded jewellery.
The majority of around 5,000 small and medium diamond CPD units have reduced working hours due to the slowdown in the last three years. As the natural diamond market stabilises and lab-grown diamonds (LGD) polishing gains momentum, the industry had started to provide full-time employment.
The CPD sector employs about 1.2 million workers, and the state government recently announced a relief package for the struggling industry. The package includes Rs 13,500 in school fee support per child for jobless artisans, an interest subsidy on loans, and a waiver of electricity duty.