As US tariff threatens to chop deep, diamond trade seems to outlive underneath strain

America accounted for roughly 30% of India’s gems and jewelry exports, valued at roughly $10 billion yearly in 2023-24. Diamonds, pure and lab-grown, make up for an enormous chunk of the sector’s exports.

Kirit Bhansali, chairman of Gems and Jewelry Export Promotion Council of India (GJEPC), warned that the 26% tariff, which might be imposed on Indian gem and jewelry exports when Trump’s reciprocal tariffs kick in, would place a major burden on each Indian exporters and American customers.

“Whereas the tariff’s software to competing nations presents each challenges and alternatives, it’s more likely to considerably affect India’s diamond and jewelry sector…. In the long run, we foresee a reshaping of world provide chains. Within the quick run, we anticipate challenges in sustaining India’s present export quantity of $10 billion to the US market. We urge the Authorities of India to progress the Bilateral Commerce Settlement between India and the US, as it could be essential in navigating the tariff points and securing long run curiosity of the sector,” Bhansali mentioned.

Trade specialists mentioned that if the 2 governments should not capable of resolve the state of affairs quickly, it might push the diamond trade in Surat nearer to a collapse. The second largest metropolis in Gujarat, Surat processes practically 85-90% of the world’s diamonds and employs over 800,000 staff.

Already, the trade has been reeling from a chronic downturn, marked by manufacturing unit closures, layoffs, and declining demand attributable to sanctions on Russian diamonds, softening of demand in key markets resembling China, the Center East, and Europe.and the competitors from lab-grown stones.

Bharat Diamond Bourse vice-chairman Mehul Shah mentioned the reciprocal tariffs introduced by President Trump might negatively affect India’s diamond trade. “If consumers all of the sudden need to pay 26% extra, it would take away them from the market,” he mentioned, worrying that this might pressure many slicing and sprucing models in Surat to shut.

Shah, who additionally chairs the Gemmological Institute of India, mentioned whereas some Indian firms could attempt to route diamonds by Dubai (which can solely have a ten% responsibility), there could be challenges vis-a-vis certificates of origin and Dubai’s restricted labour capability for jewelry manufacturing.

As a brief hole, Shah mentioned the federal government ought to permit home gross sales from India’s gems and jewelry SEZs with some relaxations.

From April 2024 to February 2025, complete gross export of gems and jewelry stood at $25.73 billion ( ₹2.17 lakh crore), registering a 13.43% decline in greenback phrases and 11.77% in rupee phrases in comparison with $29.72 billion ( ₹2.46 lakh crore) throughout the identical interval in 2023-24, based on information from the Gems and Jewelry Export Promotion Council (GJEPC).

Throughout this era, general gross imports fell by 13.31% in greenback phrases and 11.69% in rupee phrases, amounting to $17.50 billion ( ₹1.48 lakh crore) towards $20.18 billion ( ₹1.67 lakh crore) within the earlier 12 months. Throughout the diamond phase, gross exports of lower and polished diamonds totaled $12.14 billion ( ₹1.02 lakh crore), marking a 18.01% decline in greenback phrases and 16.37% in rupee phrases in comparison with $14.80 billion ( ₹1.22 lakh crore) in 2023-24.

Equally, gross imports of lower and polished diamonds noticed a pointy drop of 35.21% in greenback phrases and 34.11% in rupee phrases, amounting to $1.16 billion ( ₹9,774.63 crore) towards $1.79 billion ( ₹14,835.58 crore) within the earlier 12 months.

In the meantime, gross imports of tough diamonds have been down 26.18% in greenback phrases and 24.78% in rupee phrases, totaling $9.50 billion ( ₹80,090.86 crore) in comparison with $12.87 billion ( ₹1.06 lakh crore) in 2023-24.

The financial pressure has exacted a devastating toll.

Bhavesh Tank, vice-president of the Diamond Employees Union Gujarat (DWUG), mentioned he has submitted a listing of 63 diamond staff who died by suicide over the previous 12 months to the Gujarat authorities. “The recession is breaking us, and this tariff could possibly be the ultimate blow,” Tank mentioned.

DWUG has been on an indefinite strike since March 30, demanding monetary assist, job safety, and help for staff’ households.

On April 3, about 300 staff from RC Diamond firm in Navsari, close to Surat, joined the strike, in search of a pay hike as wages have dropped by as much as 50% amid the downturn within the final three years. Tank famous that the Gujarat authorities promised to type a committee to deal with these points, however progress stays elusive. “We’re nonetheless ready for actual assist,” he mentioned.

A Gujarat authorities official mentioned that the authorities have been engaged on a reduction bundle for the diamond staff.

Diamond baron Savjibhai Dholakia of Hari Krishna Exports mentioned the trade’s slim 2% revenue margin makes absorbing a 26% tariff very difficult. “Diamonds aren’t important commodities – consumers will merely shift to options like gold,” he cautioned.

Dholakia instructed various methods, together with routing exports to the US by different nations. “Our trade has overcome many challenges earlier than and employs lakhs of individuals – we’ll discover options to this too,” he mentioned.

Dinesh Navadiya, chairman of Indian Diamond Institute and spokesperson of Surat Diamond Bourse (SDB) mentioned many diamond firms based mostly in Surat have already got places of work in Dubai as nicely and will attempt to route the gems by the UAE. He mentioned the upper tariff imposed on China and Thailand, which have been India’s opponents, could possibly be a chance for India.

“India at present imports solely minimal portions of tough diamonds from the U.S., attracting a modest 5% customs responsibility. A possible resolution to the present problem could possibly be for India to barter a Free Commerce Settlement (FTA) with the U.S. for the gems and jewelry sector—just like agreements the UAE and Australia have secured. Such a deal might present the trade with much-needed stability and development alternatives,” he mentioned.