Diamond industry seeks urgent government aid as US tariffs cripple exports

India’s diamond industry has sought urgent government support after higher US tariffs sharply hit exports, forcing factories to shut and triggering large-scale job losses across the sector.

At the start of 2025, the industry was already grappling with weak demand from China, but steady orders from the United States had provided some relief. That cushion disappeared after US President Donald Trump imposed an additional 25% tariff on Indian goods, including diamonds, taking the total duty to 50%. Exporters say the move has severely disrupted shipments to one of their biggest markets.

Since the tariff hike, diamond exports have fallen by nearly 50%, according to industry estimates. Several exporters have either closed operations or shifted to lab-grown diamonds, which offer much thinner margins. The impact has been most severe on workers involved in cutting and polishing. In Surat, the heart of India’s diamond industry, job losses are estimated at more than 1.5 lakh.

“The government should provide some sort of assistance to diamond workers as they are suffering a lot. Their livelihood is impacted, and they have families to run,” said Kumar Jain, a diamond exporter.

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

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Until then, exporters say government intervention is critical. Those spoken to by CNBC-TV18 said the focus should be on easing compliance norms and offering targeted subsidies to help businesses survive the downturn.

Workers remain under the greatest strain, facing layoffs and wage cuts. Exporters warn that if skilled labour moves to other occupations, it will be difficult for the industry to scale up when demand returns. They are urging the government to consider a financial assistance package for workers to retain talent and ensure India is prepared when global demand picks up again.

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