Alrosa’s India Entry Threatens Surat Diamond Dominance Amid US Tariff Shock

Surat | Gujarat — Surat, the world’s largest diamond cutting and polishing centre, may soon face its biggest disruption in decades. Russia’s state-backed diamond miner Alrosa, one of the world’s largest rough diamond producers, has announced plans to enter India by setting up a diamond polishing facility, likely in Surat or Jaipur. The planned $50 million investment marks the miner’s first overseas expansion and signals a strategic move into downstream operations long dominated by Indian firms.

The timing is critical. The US — India’s biggest jewellery export market — has imposed a 50% tariff on Indian diamonds, citing concerns over India’s growing proximity to Russia. With geopolitical risks rising and margins shrinking, Surat’s industry, which polishes 9 out of every 10 diamonds sold globally, is watching Alrosa’s move with both caution and concern.

“If a mining giant starts polishing on Indian soil, the entire value chain shifts,” said a senior Surat-based diamond exporter. “Surat has enjoyed uncontested dominance for 40 years. But now, the monopoly faces a real test.”

A Direct Threat or a Strategic Opportunity?

Alrosa’s expansion into India is significant because India is already its biggest polishing partner. By establishing its own unit, the company can directly tap into India’s expertise while tightening control over global pricing and supply mechanisms.

“This is not a routine investment; it is a repositioning of power in the diamond world,” said a leading gems and jewellery consultant. “Alrosa owning a polishing facility threatens to blur the line between miner, manufacturer, and retailer.”

Industry insiders also fear that Alrosa may offer preferential access to rough diamonds for its own plant, creating an uneven playing field for independent processors in Surat. This could further strain an industry already hit hard by the US tariff shock, sluggish demand, and rising financing costs.

US Tariff Shock Intensifies Pressure

The US’s 50% tariff on Indian diamond imports — a move widely interpreted as pressure on India to distance itself from Russian trade — has compounded fears.

“Indian companies are getting squeezed from both sides — geopolitics on one end and global competition on the other,” said a Surat diamond association member. “Alrosa entering the polishing segment when export margins are already thin is a double blow.”

Jaipur Also in the Race

While Surat remains the global epicentre of polished diamonds, Jaipur has emerged as India’s coloured gemstone capital. Alrosa considering Jaipur reflects its strategy to diversify product lines, including bridal and luxury collections for the Indian and Asian markets.

A New Era for Indian Diamonds

Industry veterans argue that Alrosa’s entry could modernise India’s diamond sector with blockchain-based supply chain tools, retail partnerships, and global branding. But the immediate impact will be increased competition at a time when India’s trade security is uncertain.

“Surat has survived recessions, pandemics, and price crashes, but this challenge is different,” said another industry leader. “This is about who will control the future of the diamond industry — miners or manufacturers.”