India’s diamond business is in trouble. New tariffs from the U.S. are hurting exports, and Surat could face big economic problems.
Surat, Gujarat – August 26, 2025: India’s diamond industry, which is worth $24 billion, is in deep crisis because the United States, its biggest export customer, has put in place high tariffs. This has caused orders to drop fast, and many people in Surat, the world’s diamond polishing center, are losing their jobs. Business leaders and local leaders are worried about a possible economic disaster. Factories are closing, and the large new Surat Diamond Bourse is mostly empty.
Rising Trade Problems
The U.S. government has put new taxes on Indian products, like gems and jewelry. These are added to an existing 25% tariff, which means some goods now have a 50% tax. These tariffs are thought to be a response to India continuing to buy oil from Russia.
This trade action has made Indian diamonds too expensive on the world market. Now, they cost more than diamonds from other countries that produce and polish them.
Economic Problems in Surat
The city processes over 80% of the world’s rough diamonds. Now, Surat is seeing empty offices and lost orders, which is a common complaint in the business. Most of the 4,700 offices at the new Surat Diamond Bourse are still empty, which shows how bad the crisis is.
Small and medium-sized businesses, which are very important to the industry, are suffering the most. Many have stopped making diamonds because they don’t have enough new orders.
Job Losses Expected
This crisis will have a direct and bad impact on workers. The Gem & Jewellery Export Promotion Council (GJEPC) thinks that if things don’t get better, about 200,000 people in the industry could lose their jobs. These are mostly skilled workers who depend on this work to live.
Some of India’s biggest diamond companies are thinking about moving some of their operations to countries with lower U.S. tariffs, like Botswana. If this happens, Surat’s position as the world’s diamond center could be hurt more.
Changes in the Global Diamond Market
The U.S. is the biggest single buyer of India’s gems and jewelry, purchasing about one-third of its annual shipments. The new tariffs have quickly changed trade patterns in a painful way. Companies are trying to sell to new markets in Asia, Europe, and the Middle East, but it has been hard to find new buyers.
The price of polished diamonds has gone down because demand has dropped and many businesses are trying to sell off their stock.
India’s GST Change: New Tax Slabs & 40% Rate
Government Reaction and Future
The Indian government knows how serious the crisis is. Government leaders have said they will provide money and support to help the industry sell to different markets, but they haven’t announced any specific plans yet. They are also trying to negotiate with the U.S. government to find a solution, but it’s been slow going.
One positive thing is that there is strong demand for diamonds in India, which is helping to make up for some of the losses. Though the domestic market isn’t big enough to make up for the lost export money from the United States. Surat’s long-term future as the main diamond center of the world is uncertain.
