India’s diamond sector—a critical pillar of the country’s export landscape—is now under considerable strain following the U.S. decision to impose a 10% import duty on polished diamonds in April 2025. As part of Washington’s broader tariff overhaul, India has been singled out with a heightened 27% duty on its diamond exports to the American market, amplifying the industry’s financial challenges.
Surat, the epicenter of India’s diamond cutting and polishing, is feeling the brunt of this policy change. The city, responsible for processing approximately 80% of the world’s diamonds, has seen a significant decline in orders from U.S. buyers. Manufacturers report halted shipments and a reduction in production, leading to concerns over job losses among the city’s approximately 800,000 diamond workers.
Industry stakeholders have voiced urgent concerns. The Gem & Jewellery Export Promotion Council (GJEPC) has characterized the new tariff regime as an “overwhelming obstacle,” and is urging the Indian government to initiate bilateral trade discussions with the U.S. aimed at easing the tariff burden on exporters and mitigating price shocks for consumers.
Compounding the issue is the broader slowdown in the luxury market, particularly in China, where economic challenges have dampened consumer spending on high-end goods. Additionally, the rise of lab-grown diamonds presents a competitive threat, offering consumers a more affordable alternative to natural stones.
Amid mounting pressure, De Beers Group has joined forces with Indian officials to champion a zero-tariff arrangement for Indian-cut and polished diamonds entering the U.S. market. Ongoing consultations with India’s Commerce and Industry Minister are focused on enabling trade concessions and bolstering support for a sector already grappling with softening global demand and supply chain disruptions.
As the diamond industry navigates this “perfect storm” of challenges, stakeholders emphasize the need for swift policy interventions and strategic adaptations to sustain the livelihoods dependent on this glittering trade.
