U.S. Relies on India as Key Partner in Diamond Industry, Say Experts

Quick summary:

• The U.S. has increased import duties on Indian diamonds by 25%, bringing the total tariff to 50% effective August 27, impacting Gujarat’s diamond industry.
• the hike comes amid existing challenges like job losses, reduced orders due to the Russia-Ukraine war, and competition from lab-grown diamonds.
• India exports over one-third of its gem and jewelry output to the U.S., which accounted for $4.8 billion in diamond exports during FY 2024-25.
• Gujarat processes nearly 90% of India’s natural diamonds, with Surat housing around 7.5 lakh artisans across its diamond units; over one lakh workers have lost their jobs since April this year.
• The Gujarat government has implemented a relief scheme offering ₹13,500 per child for affected families; more than one lakh workers have sought aid under it.
• Industry leaders remain optimistic about recovery despite temporary strain. Jagdish Khunt (Surat Diamond Association) and Babu Vaghani (Lab-Grown Diamonds Association) highlighted India’s dominance in diamond craftsmanship and anticipated market stabilization during Christmas-New Year seasons.

Indian opinion Analysis:

The U.S.’s heightened tariffs signal a critical juncture for india’s diamond industry, particularly Gujarat-based units that dominate global supply chains. With American consumers driving nearly a third of India’s gem exports, these tariffs could deter consumption or force adjustments within the ecosystem-impacting profit margins along both ends of trade.

India’s stronghold as the hub for skilled artisans ensures that drastic shifts are unlikely overnight; however, sustained economic pressure may accelerate alternatives like lab-grown diamonds or restructuring within already struggling sectors. Onshore relief measures are timely but may offer limited impact unless long-term strategies focus on diversifying export markets and technological advancement in processing methods.

While market resilience is expected during peak retail seasons like Christmas in the U.S.,labour concerns underscore deeper vulnerabilities when localized industries remain tethered heavily to single-country dependencies.

Read more: The hindu