Trump Tariffs Could Cost Surat’s Diamond Sector $5 Billion And 1.25 Lakh Jobs: Report

Surat’s diamond sector is bracing for a severe hit after US President Donald Trump announced an additional 25 per cent tariff on Indian imports, set to rise to 50 per cent from 27 August.

According to an Indian Express report, India, which supplies 68 per cent of the US’s diamonds by volume and 42 per cent by value, faces steeper duties than competitors like Israel, where the tariff stands at 19 per cent.

The move comes just months before Christmas, a period that accounts for nearly half of annual international sales forcing many exporters to halt American orders.

Hitesh Patel of Dharmanandan Diamonds warned that “exports will crash further” following recent declines of 25 per cent in shipments and 30-35 per cent in production.

The Gems & Jewellery Export Promotion Council (GJEPC) reported that cut and polished diamond exports to the US have already fallen from $9.86 billion in 2021-22 to $4.81 billion in 2024-25.

Its chairman, Kirit Bhansali, cautioned the 50 per cent duty “may lead to a loss of an estimated 1,25,000 jobs” in Gujarat, Maharashtra, and Rajasthan.

Industry leaders, including Vallabhbhai Lakhani of Kiran Gems, stressed that the US market is irreplaceable. Vijay Mangukiya of Dhani Jewels added, “There is no other country which can replace the consumption capacity of US in the entire world.”

Surat, where eight out of ten of the world’s polished diamonds are crafted, employs over six lakh polishers, many of whom are migrants from Saurashtra.

With prices for rough diamonds falling from $1,000 per carat in 2022-23 to $600, and demand weakening, some factories have shifted to lab-grown diamonds, though their prices are also under pressure.

The GJEPC has urged the Commerce Ministry to introduce a reimbursement mechanism for 25-50 per cent of the additional US tariffs from August to December 2025.

While the UK has recently scrapped duties on Indian gems and jewellery, its market remains far smaller than the US.

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