US tariffs shatter Surat diamonds, fueling job losses and school dropouts

Surat | Gujarat –— While a report tabled in the Parliament winter session on state-wide school dropouts has placed Gujarat on the top with 2.4 lakh students dropping out in 2025-26, the world’s largest diamond cutting and polishing centre in Surat is staring at a grim reality. According to the Diamond Workers’ Union of Gujarat (DWUG), the school drop out numbers are set to increase after March 2026 as thousands of diamond workers are facing an employment crisis due to the higher US tariff on polished diamonds. 

In 2025-26, Gujarat reported the highest number of out-of-school children, with 2.4 lakh students dropping out as per the report tabled in the Parliament. In 2024, only 54,541 children dropped out. Thus, 2025-26 saw a massive 341% jump.

In Surat, over 600 students have dropped out of 24 municipal corporation schools, as per official data.

Bhavesh Tank, vice-president of DUWG said, “There are still more than 26,000 diamond workers whose education relief applications are still pending with the Gujarat government. Last year, the Gujarat government promised Rs 13,500 per child education relief to the diamond workers”

“The wages of diamond workers, who were earning Rs 40,000 to Rs 45,000 per month, have come down drastically to less than 20,000 per month. It is almost 50% cut in wages. There are many in the industry who are rendered jobless. This scenario is likely to get worse after March 2026 as there are no visible signs of a positive trade deal between India and the US” said Tank. 

The glitter of diamonds has faded sharply in Surat, and what is emerging instead is a disturbing rise in crime linked directly to the prolonged recession in the diamond industry. In just two days, Surat police busted two cases that starkly highlight how economic desperation is pushing former diamond workers and traders towards illegal activities for survival.

About half a dozen cases have been reported in the diamond city where the diamond workers and traders are implicated in the crimes ranging from cyber frauds, fake currency circulation and drug trafficking. 

“More than 66 diamond polishers in Surat have committed suicide in the last one-and-a-half-year. Due to the ongoing war between Russia and Ukraine and the US tariffs on Indian goods, the situation of small workers, traders and manufacturers has turned from bad to worse” Ramesh Jilariya, president of DWUG.

The Surat diamond industry employs roughly 7 lakh diamond workers in more than 4,000 big, small and medium diamond units. The small units operated with 10-15 emery wheels have shut shops, rendering more than 30,000 workers jobless. 

The glitter of India’s gems and jewellery sector has dimmed with the exports facing a sharp jolt to the United States, which is the world’s largest gems and jewellery consumers market. According to the data provided by the Gems and Jewellery Export Promotion Council (GJEPC), during  April to December 2025, exports to the US fell by a steep 44.42% year-on-year to US$ 3.86 billion, compared to US$ 6.95 billion in the same period last year, highlighting the huge impact of the tariff on Indian goods in the US, inflationary headwinds and dwindling consumer demand. 

GJEPC Chairman Kirit Bhansali said that the US is India’s largest export destination, accounting for an average of 30% of our gems and jewellery exports. The sharp decline in shipments is a matter of serious concern. It is necessary that tariff and other time-sensitive issues are resolved positively in bilateral trade talks.