Indian diamond cutting hub may move abroad as 50% US tariff bites

TARIFF IMPACT | India's workers are renowned for their ability to cut and polish small diamonds, a niche market where India has a strong presence

- Melvyn Thomas

A deafening silence has replaced the rhythmic whir of emery wheels in Surat, the heart of India's diamond cutting and polishing industry. A "tsunami" in the form of a 50% tariff imposed by the United States is threatening to undo over six decades of economic prosperity and skilled craftsmanship, leaving thousands of workers facing an uncertain future.

Once a sleepy town in the 1960s, Surat became a global diamond hub after the Indian government liberalized the import and export of gems, a move that capitalized on its low-cost labor and burgeoning workforce. Today, that legacy is under threat.

"The 50% tariff on polished diamonds is like a tsunami and we have to pack our bags in search of the countries where the tariffs are on the lower side," said a leading diamond company owner who requested anonymity, highlighting the grim reality facing the industry. With about 40% of India's polished diamond exports going to the US annually, the new tariff is an existential threat.