Diamond polishers in Surat face a rougher grind as US tariffs cut deep

A tight alley in the heart of Surat leads to the basement of a worn-down building, where more than 20 motorcycles are crammed wheel-to-wheel, leaving barely any room to walk.

- AJINKYA KAWALE

The building may look abandoned to a stranger, but a few steps inside the commercial complex reveal a floor that manufactures one of India's most valuable exports: diamonds.

This nondescript diamond polishing unit is packed with 26 artisans seated shoulder-to-shoulder, armed with precision tools and magnifying loupes, facing whirling abrasive plates.

These skilled men refer to pages filled with dense grids of numbers to cut raw diamonds into meticulous shapes such as hearts, ovals, emeralds, and marquises.

More than nine out of 10 diamonds worldwide are polished in Surat, making it a global hub for diamond finishing.

Units like these form the backbone of the city's industry, which specialises in polishing natural and laboratory (lab)-grown diamonds.

Surat's roughly 5,000 diamond units depend heavily on large export markets such as the US—a country whose tariff policies are making them anxious.

"The short-term impact of such tariff structures means that the India-US diamond and jewellery trade will come to a standstill. Everyone goes into wait-and-watch mode since there are multiple aspects to study," said Rajat Wani, regional director—Surat, Gem and Jewellery Export Promotion Council (GJEPC).

Earlier this month, US President Donald Trump announced sweeping reciprocal tariffs on India, levying a 26 per cent duty on gem and jewellery exports to the country.

Days after the announcement, he imposed a 90-day embargo on the full implementation of the new tariffs, while still levying a 10 per cent tax on most major imports, throwing sectors like Indian gem and diamond into limbo.

Previously, cut and polished diamonds, along with lab-grown ones, did not attract any tariffs, while gold jewellery was taxed at 5-7 per cent.

After the Trump administration's decision, these items now attract duties of 26 per cent and 31-33 per cent, respectively.