By Surat, India—long hailed as the world’s diamond polishing hub—is grappling with an unprecedented crisis. The U.S. government’s imposition of a 10% import duty on polished diamonds in April 2025, coupled with a looming 27% tariff on Indian diamond exports, has sent shockwaves through the industry. These tariffs arrive at a time when the global luxury market is already reeling from economic slowdowns and shifting consumer preferences.
The United States, accounting for over 30% of India’s gem and jewellery exports, has traditionally been a vital market for Surat’s diamond industry. However, the new tariffs have led to a significant decline in orders from U.S. buyers. Manufacturers in Surat report halted shipments and a reduction in production, leading to concerns over job losses among the city’s approximately 800,000 diamond workers.
Industry leaders express deep concern over the tariffs’ impact. The Gem & Jewellery Export Promotion Council (GJEPC) has labeled the situation as a “significant burden,” urging the Indian government to negotiate a bilateral trade agreement with the U.S. to alleviate the pressure on exporters and consumers alike.
Compounding the issue is the broader slowdown in the luxury market, particularly in China, where economic challenges have dampened consumer spending on high-end goods. Additionally, the rise of lab-grown diamonds presents a competitive threat, offering consumers a more affordable alternative to natural stones.
In response to the crisis, De Beers Group is collaborating with the Indian government to advocate for a zero-tariff policy on Indian-cut and polished diamonds entering the U.S. Discussions with India’s Commerce and Industry Minister aim to facilitate trade liberalization and support the beleaguered industry.
As the diamond industry navigates this “perfect storm” of challenges, stakeholders emphasize the need for swift policy interventions and strategic adaptations to sustain the livelihoods dependent on this glittering trade.