Massive U.S. Tariff Hits India’s Diamond Industry — Thousands of Jobs at Risk!

India’s diamond industry is facing a serious challenge as new U.S. tariffs take effect, dealing a blow to exports and threatening thousands of jobs. The 27% import duty imposed by the United States targets gems and jewellery, one of India’s top export sectors.

Surat, the heart of India’s diamond polishing business and home to thousands of artisans and traders, is already feeling the impact. The city processes over 80% of the world's rough diamonds and plays a key role in the global supply chain.

“The new tariffs will reduce demand in the U.S., and job losses in India are very likely, at least in the near future,” said Dinesh Navadiya, Chairman of the Indian Diamond Institute.

The U.S. is India's biggest customer in this sector, accounting for more than 30% of the country’s gem and jewellery exports—worth nearly $10 billion in 2023–24. With demand already declining in other regions like China, Europe, and the Middle East, the U.S. tariffs come at a particularly bad time.

Diamond traders in Surat describe the current situation as even worse than during the 2008 global financial crisis. Business activity has slowed significantly in the city’s massive trading market, which normally hosts over 10,000 traders daily.

“This is the toughest phase I’ve seen in five decades,” said veteran trader Mansukh Mangukiya.

Smaller businesses are especially vulnerable. “Larger companies may survive with reduced margins, but many small manufacturers might be forced to shut down,” said Sevanti Shah, Chairman of Venus Jewels.

The industry is also concerned about the future of the Surat Diamond Bourse, a newly built trade complex meant to generate thousands of jobs. Spread across 6.6 million square feet, the facility was launched in 2023 and is currently the world’s largest office building.

With the U.S. market weakening, exporters are rushing to complete shipments before the tariffs are fully implemented. “We’re trying to deliver as many orders as we can before the new rates apply,” said Shaunak Parikh, Vice Chairman of the Gem and Jewellery Export Promotion Council.

He warned that if U.S. orders continue to slow, India may have to cut back on importing rough diamonds and adjust production levels accordingly.

The industry also expects retail prices in the U.S. to rise, which could further reduce consumer interest. “Higher costs in the U.S. will impact sales, and that means lower exports from India,” said Vipul Shah, Managing Director of Asian Star, a major exporter.

For many workers and small business owners in Surat, the situation is already turning grim. Chetan Navadiya, once a diamond manufacturer, had shifted to contract-based work to make ends meet. Now, even that seems uncertain.

“I lost my business in the slowdown and took up small jobs to survive,” he said. “But with these new tariffs, even those jobs may disappear.”

As the industry looks for new markets, experts agree that no country can match the size or importance of the U.S. market. For now, India’s diamond industry faces a difficult road ahead.

Also Read: S&P Global to Revise World Economic Forecasts After U.S. Tariff Surprise