Editor’s Note
**Editor’s Note:** The U.S. imposition of a 50% tariff on Indian exports marks a significant escalation in trade tensions, with India’s diamond processing industry—responsible for 90% of global cutting and polishing—facing a severe blow amid already cooling market demand.
On Wednesday (August 27), the United States officially began imposing a 50% tariff on Indian products exported to the US, which means the Indian diamond processing industry will face a severe blow.
India is the world’s largest natural diamond processing country. Public data shows that currently, about 90% of the world’s diamond cutting and polishing work is completed in India. However, the cooling global diamond market demand over the past two years has put considerable pressure on India’s diamond processing industry.
This new tariff policy implemented by the US has made the already sluggish Indian diamond export business even worse.
According to statistics from the Gem and Jewellery Export Promotion Council (GJEPC) of India, India’s total jewelry exports in the fiscal year 2023-2024 were approximately $32 billion. The US is India’s largest diamond export market, accounting for one-third of India’s annual gem and jewelry exports, with an export value of about $9 billion.
Due to the new tariffs, some US customers have begun canceling orders, and many local factories in India are facing operational difficulties. Some diamond processing plants are reducing rough diamond purchases, lowering inventory, and cutting working hours to ensure cash flow.
At the same time, many factories are planning to relocate processing operations to other countries that are subject to lower tariff rates by the US.
Some institutions predict that the tariff increase will directly raise procurement costs for US importers, and it is expected that the retail price of natural diamonds in the US may rise by 5% to 10%, accelerating consumers’ shift to more cost-effective lab-grown diamonds or the second-hand jewelry market.