The diamond industry in India is facing a significant threat due to the 50% tariffs imposed by US President Donald Trump on Indian imports. The tariffs, which include an additional 25% penalty for India’s continued buying of Russian oil, could be the final nail in the coffin for many small and medium-sized diamond cutting and polishing units in the country.
Kalpesh Patel, a 35-year-old diamond business owner in Surat, Gujarat, fears that he may not be able to continue his business due to the high tariffs. “We still have some orders for Diwali and will try to complete them,” Patel said. “But we might have to shut the business even before the festival, as exporters might cancel the orders due to high tariffs in the US.” Patel’s unit is among the 20,000-odd small and medium traders in Surat, known as the “Diamond City of India,” which together cut and polish 14 out of every 15 natural diamonds produced globally.¹
The tariffs could have far-reaching repercussions on the Indian economy, disrupting critical supply chains, stalling exports, and threatening thousands of livelihoods. According to the Gem and Jewellery Export Promotion Council (GJEPC), India’s apex body for the industry, the country exported cut and polished gems worth $4.8 billion to the US in the 2024-25 financial year, accounting for more than one-third of India’s total exports of cut and polished diamonds.
Dimpal Shah, a Kolkata-based diamond exporter, said that orders have already started getting canceled due to the high tariffs. “Buyers in the US are refusing to offload the shipped products, citing high tariffs. This is the worst phase of my two-decade-old career in diamonds.”
The industry is urging the government to secure a favorable reduction in tariffs to prevent widespread job losses. Kirit Bhansali, chairman of the GJEPC, said that the move would have far-reaching repercussions on the Indian economy and hopes for a favorable reduction in tariffs. “We hope to get a favorable reduction in tariffs; otherwise, it would be difficult to survive.”
Ajay Srivastava, founder of Global Research Trade Initiative, termed the Trump government’s additional hike as an act of “hypocrisy,” citing how the US itself continues to trade with Russia, and how China – Russia’s biggest oil buyer – faces no similar penalty. “Trump is targeting India out of frustration as it refused to toe the US line on the Russia-Ukraine conflict, and for its refusal to open its agriculture and dairy sector.”
The diamond sector in India is already reeling from the COVID-19 pandemic and the Russia-Ukraine war. Ramesh Zilriya, president of Gujarat’s Diamond Workers Union, claimed that 80 diamond workers have died by suicide over the past two years due to the economic crisis. Once the Trump tariffs fully kick in, Zilriya fears that up to 200,000 people in Gujarat may lose their livelihoods.
Traders say that the need of the hour is to increase domestic demand for diamonds and diversify to new markets. Radha Krishna Agrawal, director of Narayan das Saraf Jewellers, said that a stronger domestic market would not only contribute to the local economy but also create jobs for thousands of people. The tariffs could prove a “blessing in disguise” if they end up reducing the dependence of India’s gems industry on other countries.