US 50% Tariff Threatens 2 Lakh Jobs in India’s Diamond Industry

Surat | Gujarat — With the announcement of a 50% tariff by the United State on Indian goods, the Indian gems and jewellery industry, especially the diamond industry is staring at over 1.50 lakh job losses in the next few months. The United States is the single largest market, accounting for over $10 billion in exports—nearly 30% of the industry’s total global trade, while about 40% of the polished diamonds manufactured in Surat, Gujarat are destined to the US market. A blanket tariff of this magnitude is severely devastating for the sector. 

Gems and Jewellery Export Promotion Council (GJEPC) chairman Kirit Bhansali said, “The 50% tariff by the US on Indian goods is all set to take away jobs of more than 1.50 lakh workers in the diamond and jewellery sector. The job losses will be more in the centres like SEEPZ in Mumbai, Surat and Jaipur” 

Bhansali said, “There is 12-15% growth in the Indian gems and jewellery market in the domestic market. We are very strong in the domestic market and it is doing really well. We are seeing more than 40% growth in the Indian market in the coming years due to the success of the IIJS show. The impact is only limited to the US. We are in talks with the Maharashtra, Gujarat and Central  government for providing a relief package to the diamond workers”

Bhansali, who was part of the Indian business delegation in the recent UK tour of Prime Minister Narendra Modi said, “We are happy to announce that the UK has abolished 4% duty on diamonds and jewellery. India has an annual $1 billion worth of gems and jewellery exports to the UK. We are confident that the export to UK will increase in the coming years as we will have to lessen our dependency on the US”

In the past three years, more than 100 diamond workers have taken their lives, according to the Diamond Workers’ Union of Gujarat (DWUG); 55 of them in the past year.

Surat, also known as “Diamond City”, in the western Indian state of Gujarat, is responsible for processing 90 per cent of the world’s diamonds. The gems are one of India’s top export sectors and the city has 5,000 “units”, employing more than 800,000 workers. For diamond polishers, the job entails 12-hour days, usually beginning at 8am, and the workspaces are congested and humid, with men working shoulder to shoulder with tireless precision. Over time, the unrelenting polishing, grinding, buffing and inspecting becomes almost mechanical.

Bhavesh Tank, vice-president of DWUG said, “Even as the US has imposed a 50% tariff on the diamond industry, it is not going to affect the big diamond companies having their offices in Dubai, UAE and Antwerp. The big diamond companies will divert the polished diamonds from Dubai to the US to save on the US tariff. However, the small and medium exporters in Surat who are also the manufacturers will have no other option but to shut their shops. This is going to create a major unemployment in the diamond industry”

Tank added, “We are anticipating more than 2 lakh job losses in the coming few months due to the 50% US tariff. There are more than 8 lakh diamond workers in Surat, Amreli, Bhavnagar and other small centres in Gujarat”

Over the past year, more than 50,000 workers have lost their jobs in Surat, according to the DWUG. India’s export of cut and polished diamonds dropped to its lowest level in nearly two decades in 2024-25, partly due to Russian sanctions.

Factory owner Shailesh Patel is planning to reduce his workforce from 100 workers to 20 in September due to the 50% US tariff. He used to export about 95% of the polished diamonds to the US. As Patel is faced with heavy tariffs from the US, he is planning to reduce the workforce. 

“This is one of the worst ever situations for me and many other small manufacturers-cum-exporters like me. My hands are all tied up and I will soon have to make further lay-offs or go bankrupt” said Patel.

Another dilemma they face is that the demand from the world’s biggest diamond markets, the US and China, is declining because of competition from less expensive lab-grown diamonds. They accounted for 1 per cent of diamond sales in 2015, but by 2024, that figure rose to 20 per cent. A decade ago, synthetic diamonds were 10 per cent cheaper than natural diamonds, but today they are 80-90 per cent cheaper than their natural counterparts.