Editor’s Note
This article highlights a significant downturn in India’s natural diamond polishing sector, with a projected 22% revenue decline for FY26. The analysis is based on a recent Crisil Ratings report, underscoring the industry’s most challenging period in recent memory.
India’s natural diamond polishing industry is facing its worst year in nearly two decades, with revenues projected to fall nearly 22% to about $12.5 billion in FY26, from $16 billion last year, according to a Crisil Ratings report released on Thursday.
US President Donald Trump’s decision to double tariffs on imports from India threatens to take the sheen off the country’s diamond polishing industry, concentrated in Prime Minister Narendra Modi’s home state of Gujarat.
The projected decline comes after Trump imposed a punitive 25% duty on the country for buying Russian oil, in addition to a same tariff levied earlier on Indian goods entering the US. The tariffs took effect on Wednesday. The steep 50% tariff on polished diamond exports compounds the industry’s struggles after a 40% decline in revenue over the past three years, driven by weaker prices, slowing demand in the US and China, and the rapid rise of lab-grown diamonds.
Crisil’s analysis of 43 diamond polishers, which together account for nearly a fourth of the industry’s revenues, points to this trend.
The new tariff wall has made the US market, which accounts for more than a third of India’s polished diamond exports, significantly harder to access.
India is one of the world’s largest exporters of gems and jewellery, with the US being its biggest market. In FY25, exports from the sector to the US stood at $9.94 billion, marginally up from $9.91 billion in FY24. Shipments to the US accounted for about 33% of India’s total gems and jewellery exports, which were valued at $29.80 billion in FY25.