Experts anticipate that exports of non-industrial diamonds — diamonds suitable for jewellery or investment — to the US would be hit because of the extra tariffs. India accounted for 68% in volume and 42% in value ($5.79 billion) of the US’s total diamond imports in 2024, as per data from the Gems & Jewellery Export Promotion Council (GJEPC).
The second highest value of diamond imports into the US, 28% in value, was from Israel, on which Trump has imposed only 19% tariff.
Hitesh Patel, director of Surat-based Dharmanandan Diamonds Pvt Ltd, which has a turnover of around Rs 7,000 crore, said exports to the US have already dropped 25% over the last couple of years, and the production in the factories has fallen 30-35 per cent. “With the imposition of new tariffs, exports will crash further,” he told The Indian Express.
Patel, whose company had made news when it bought the monogrammed suit worn by Prime Minister Narendra Modi in his meeting with former US President Barack Obama for Rs 4.31 crore in 2015, said, “The diamond industry players involved in exports are keeping an eye on August 27, when the 50% tariff will be effected. If nothing happens, we will negotiate with buyers in the US and request them to bear some part. When the industry is facing such tough times, the relationship between buyer and seller is put to the test.”
National chairman of the GJEPC, Kirit Bhansali, said the imposition of high tariffs and the significant reduction in exports in the Indian gems and jewellery sector will hit Surat and Mumbai the hardest.
The export of cut and polished diamonds (CPD) to the US has seen a steady drop to USD 4.81 billion in 2024-25 from USD 9.86 billion in 2021-22. The US is the largest export market, accounting for nearly a third of India’s annual gems and jewellery exports.
The GJEPC, in a July 10 letter to the Commerce Ministry, said that in June this year, the provisional gross export of CPD declined by 23.49% in dollar terms, while that of lab-grown diamonds (LGD) dropped by 24.95%, when compared to the same period last year.
“(The imposition of the 50% tariff by the US) may lead to a loss of an estimated 1,25,000 jobs in the coming four-five months — the states of Gujarat, Maharashtra and Rajasthan being the most impacted. Such job loss is expected to impact several segments, including diamond cutting and polishing, gold and silver jewellery, and coloured gemstones. The reduced exports and job losses will have a cascading effect on the economy,” Bhansali said.
Vallabhbhai Lakhani, owner of Kiran Gems, one of the top players in the market, said, “We export 70% of our goods to the US. Due to the geopolitical situation, our exports to the US had already gone down to 40%. Now with a new tariff of 50%,,we are worried.” He said it is not possible to reroute diamonds to the US from other countries with lower tariffs since the place of processing has to be necessarily mentioned.
US is unlike other export destinations, said Vijay Mangukiya, Chairman, Dhani Jewels, another big player. “There is no other country which can replace the consumption capacity of US in the entire world. There are other countries to whom we export, but they are no match to the US.”
Dharmanandan Diamonds, which has its presence in Hong Kong, China, the US, Belgium and Botswana, exports cut and polished diamonds. “ In 2022-23, when business was booming, the price of rough diamonds was $1,000 per carat, which has now gone down to $600 per carat. The reason behind the dip in the prices of rough diamonds is that there is no demand for polished diamonds in the international market,” Patel from DDPL said.
Out of every 10 polished diamonds found in the world, eight are cut and polished in Surat, which is known as the hub of the natural CPD and LGD, which are either sold loose or studded in gold and silver. The city has around 5,000 small, medium and large diamond factories employing over six lakh polishers — a job involving precision skills and trust, and comprising mostly migrants from the Saurashtra region of Gujarat. Surat also has a gems and jewellery special economic zone and the Gujarat Hira Bourse.
According to Bhansali, this sudden increase in tariff rates risks eroding India’s market share, could lead to cancellation of existing orders, blocking working capital, and affecting employment and MSME sustainability. “For other competing countries like Turkey, Vietnam, Thailand and Dubai, the US has levied lower tariffs between 15% and 20%. This has made Indian products relatively less competitive in the US market. Also, there will be the possibility of trade rerouting through low-tariff destinations such as Mexico, Canada, Turkey, UAE, or Oman, which will impact our exports extensively”, said the GJEPC chairman.
However, with the United Kingdom scrapping duty on gems and jewellery imported from India recently, there is a possibility of diamond merchants exploring the UK as a potential market.
Last year, gems and jewellery worth $9,236.46 million were exported to the US from India, while exports to the UK stood at only $941 million.
Before April 2025, there were no tariffs on the CPD and LGD diamonds exported to the US.
Already reeling
De Beers, which mines a third of the world’s rough diamonds, curtailed production by 36% in the second quarter this year as compared to the corresponding period in 2024, given the “prolonged period of lower demand” — a move that Surat’s major diamond players saw as an attempt to help stabilise the market.
With the rough diamond production going down, the diamond cutting and polishing units in Surat also curtailed their production, reducing the working hours of diamond polishers. Many diversified into producing LGDs, which are cheaper than natural diamonds.
Ghanshyam Patel, a natural diamond factory owner at Katargam in Surat, ran a diamond cutting and polishing unit employing over 70 polishers, which is now down to a strength of 10.
“Earlier, I was running a natural diamond cutting and polishing unit, and now I have shifted my business to LGD. For natural diamonds, we need more capital on hand, while LGD is less capital-intensive. There is a major price variation in both diamonds. Now the LGD prices have also gone down, so we are facing tough times. Several of our emery wheels are lying in the corner of the factory after the lay-offs,” he said.
Jewellery exporter Sevanti Shah of Venus Gems, who has experience of six decades in the business, is hopeful. Shah said, “We have to watch the situation till August 27. Even if the tariff is high, buyers in the USA who want to purchase diamond-studded jewellery will surely shop for their loved ones. They may compromise on the size, but they will surely buy it.”
The volume of business for gems and jewellery peaks at Christmas.
Another Surat-based jewellery exporter, Chunibhai Gajera of Laxmi Diamonds, said his business has grown in the last few years as he explored newer markets like the Middle East and other countries, particularly after the Russia-Ukraine war.
Executive director of GJEPC, Sabyasachi Ray, said the council wrote to the Commerce Ministry on August 7 to come to the aid of the industry. “In our suggestions to the ministry, we mentioned introducing a targeted reimbursement mechanism for 25-50% of the additional US-imposed tariffs, applicable from August to December 2025,” he said.
India accounted for 68% in volume and 42% in value ($5.79 billion) of the US’s total diamond imports in 2024, as per data from the Gems & Jewellery Export Promotion Council (GJEPC). 
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