Industry at lowest ebb - Supply chain disruption, human fallout main concerns

India’s diamond export industry, long reliant on the US as its biggest market, is reeling under the weight of the Trump administration's steep 50% tariffs. From shrinking orders and a piling inventory, to unit closures and mass layoffs, the impact has been severe. The human situation is particularly worrisome, as the diamond export sector is highly labour intensive, employing over a million workers directly and indirectly. If a solution is not found in the near future, the fallout will be disastrous, both for the trade and human lives

- Suneeta Kaul

It has been raining troubles on the diamond export hubs of India, with Surat and SEEPZ being the worst-hit. The sector has been reeling under a series of crises in recent years, with the COVID pandemic, the Russia-Ukraine conflict, the collapse of the Chinese market, and the onslaught of LGDs taking the shine off the industry.

And now, the Trump tariffs have happened. It is the last straw that might break the industry's back. With duties jumping from 10% to 50% in a matter of months, the trade, both Indian and global, has been tossed into uncertainty. Supply chains are being disrupted, and industry stakeholders are getting increasingly worried.

The 50% tariff on Indian diamonds and gems, which took effect in late August this year, has been an unexpected shock of a severe magnitude, impacting India's overall $32-billion gems and jewellery export market. According to the GJEPC, India exported gems and jewellery worth $11.58 billion to the US in 2024, accounting for about 34% of its global exports. With the steep tariffs in place, the entire industry is now under a cloud. According to Crisil Ratings, the revenues for the domestic industry, which polishes nearly 95% of all diamonds produced in the world, are set to drop to their lowest since 2007.

The immediate fallout of the tariffs