Diamond industry seeks urgent government relief as US tariffs hit exports

India’s diamond industry has sought urgent government support after higher US tariffs sharply impacted exports, forcing factory closures and triggering large-scale job losses across the sector, as reported by CNBC-TV18.

At the beginning of 2025, the industry was already facing weak demand from China, but steady orders from the United States had provided partial relief. That support eroded after US President Donald Trump imposed an additional 25 per cent tariff on Indian goods, including diamonds, taking the total duty to 50 per cent, exporters said, adding that the move has severely disrupted shipments to one of their largest markets.

Following the tariff increase, diamond exports have declined by nearly 50 per cent, according to industry estimates. Several exporters have either shut operations or pivoted towards lab-grown diamonds, which yield significantly thinner margins. The impact has been most acute for workers engaged in cutting and polishing activities. In Surat, the hub of India’s diamond industry, job losses are estimated at more than 1.5 lakh.

Diamond exporter Kumar Jain said the government should provide assistance to diamond workers, stating that their livelihoods have been severely affected and that they have families to support.

India has signed free trade agreements with countries including the United Kingdom and Oman, and broader trade pacts with Switzerland, Norway, Iceland and Liechtenstein. However, exporters said developing trade in high-value products such as diamonds takes time. The industry is also hopeful of an early Indo-US trade agreement that could help revive demand from the American market.

Until such an agreement materialises, exporters told CNBC-TV18 that government intervention is critical, with calls for easing compliance norms and offering targeted subsidies to help businesses weather the downturn.

Workers continue to bear the brunt of the slowdown, facing layoffs and wage cuts. Exporters warned that if skilled labour shifts to other occupations, it would be difficult for the industry to scale up when demand returns. They have urged the government to consider a financial assistance package for workers to retain talent and ensure the sector is prepared when global demand improves.