Surat’s diamond industry is facing another major setback after US President Donald Trump announced an additional 25% tariff on imports from India, just months before the crucial Christmas season. The festive period accounts for nearly half of the industry’s annual international sales, and orders from American buyers have already been put on hold.
According to a media report, Experts warn the new tariffs will hit exports of non-industrial diamonds—used in jewellery and investments—hard. India supplied 68% of the US’s diamond imports by volume and 42% by value ($5.79 billion) in 2024, according to the Gems & Jewellery Export Promotion Council (GJEPC). In comparison, Israel—the second-largest supplier—faces only a 19% tariff.
Surat-based diamond exporters say the sector has already seen a 25% drop in exports to the US in recent years, with factory production down by up to 35%. The new 50% tariff, set to take effect on August 27, could worsen the decline and lead to an estimated loss of 1.25 lakh jobs in Gujarat, Maharashtra, and Rajasthan.
Surat, which processes 8 out of 10 polished diamonds in the world, employs over six lakh skilled polishers, most of them migrants from Saurashtra. The city’s 5,000 diamond units, along with Mumbai’s trade hubs, will be the worst hit. Competing countries like Turkey, Vietnam, and Thailand enjoy far lower US tariffs of 15–20%, making Indian diamonds less competitive.
Industry leaders fear cancellations, blocked working capital, and shrinking market share. Some exporters are exploring new markets like the UK, which recently scrapped duties on Indian gems and jewellery, but the US remains irreplaceable in terms of demand.
The global slowdown has already forced major players like De Beers to cut rough diamond production by 36%, prompting many Surat factories to reduce working hours or switch to lab-grown diamonds (LGDs), which are cheaper but now also facing falling prices.
Despite the crisis, some remain hopeful. Veteran jewellers believe US buyers will still purchase diamond jewellery—though perhaps smaller pieces—during Christmas. Industry bodies have urged the Indian government to provide targeted reimbursement to offset part of the US tariffs and protect jobs until December.