Embattled diamond industry stares at deeper crisis with 25% tariff
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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 sweeping 25% tariff on all Indian goods, along with vague penalties affecting strategic ties, is a deeply concerning development. If implemented, this move could have far-reaching repercussions across India's economy, disrupting critical supply chains, stalling exports, and threatening thousands of livelihoods," said Kirit Bhansali, chairman, Gem and Jewellery Export Promotion Council (GJEPC).
"The Indian gem and jewellery sector, in particular, stands to be severely impacted.
The US is our single largest market, accounting for over $10 billion in exports — nearly 30% of our industry's total global trade. A blanket tariff of this magnitude will inflate costs, delay shipments, distort pricing, and place immense pressure on every part of the value chain — from small artisans to large manufacturers," he added.
Vipul Shah, former GJEPC chairman and a diamantaire, said, "We were hopeful of a recovery this festive season.
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But if the new tariff takes effect, it will severely impact the industry."
The majority of around 5,000 small and medium diamond CPB 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 started to providing full-time employment.
The CPD sector employs about 12 lakh 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.
"In this scenario, fresh orders and supply to the US will slow down drastically. Local buying has already stopped, and manufacturing will be hit severely if the tariff is not withdrawn," said Jagdish Khunt, president of the Surat Diamond Association.
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