"conditions are worse than during the 2008 financial crisis".
A wave of anxiety has gripped Surat, India’s diamond polishing hub, as new US tariffs threaten to derail the country’s gem and jewellery exports.
The United States imposed a 27% reciprocal tariff on Indian gem and jewellery imports on April 3, 2025. The US buys over 30% of India’s exports in this category.
Dinesh Navadiya, chairman of the Surat-based Indian Diamond Institute, said:
“Tariffs will hit hard the demand for diamonds in the United States and job losses look inevitable, at least in the short term.”
Surat, the second-largest city in Gujarat, polishes more than 80% of the world’s rough diamonds.
India processes nine in every 10 diamonds sold globally.
The city’s bustling diamond market, where over 10,000 traders and brokers meet daily, has fallen silent.
According to veteran trader Mansukh Mangukiya, “conditions are worse than during the 2008 financial crisis”.
Smaller manufacturers are expected to bear the brunt of the US tariffs.
Sevanti Shah, chairman of Venus Jewels, said: “Many smaller manufacturers will have no choice but to shut down.”
The US imported nearly $10 billion (£7.7 billion) in Indian gems and jewellery in 2023/24. The sector, India’s third-largest export to the United States, employs millions of artisans.
Poorer prospects now cloud the future of the Surat Diamond Bourse, which was opened by Prime Minister Narendra Modi in 2023.
Spanning 6.6 million square feet, it was promoted as the world’s largest office building.
Dealers say finding an alternative to the US market will be difficult. The industry may cut production and reduce rough diamond imports to adjust.
Shaunak Parikh, Vice Chairman of the Gem and Jewellery Export Promotion Council, said:
“Exporters are making last-minute efforts to ship as much as possible to the United States before its new tariffs take effect.”
Some US orders may be cancelled or delayed.
Vipul Shah, managing director of leading diamond exporter Asian Star, said:
“The tariffs would also drive up US prices, crimping demand.”
For many workers, the future is bleak.
Chetan Navadiya, a manufacturer turned job-work contractor, said:
“I lost my business due to the market slowdown.
“I took up job work to survive, but even those contracts may not come by now, because of US tariffs.”
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