The Indian diamond cutting and polishing sector is reeling from steep US tariff hikes, which have surged from 10 per cent in April to 50 per cent in August,
triggering the loss of nearly 100,000 jobs in Gujarat’s Saurashtra region. According to Gujarat Diamond Workers Union vice-president Bhavesh Tank, the job losses escalated sharply in the past 10 days as tariffs first rose to 25 per cent and then doubled. Most redundancies have occurred in small units in Bhavnagar, Amreli, and Junagadh, after US customers postponed or cancelled orders, said a ET report. “These units, employing 300,000–400,000 people, were already under strain due to slow offtake from US and Chinese buyers. The April tariff hike created uncertainty, drying up cutting and polishing work. Workers earning Rs 15,000–Rs 20,000 per month have been let go,” Tank said to ET. Larger diamond firms are reluctant to speak publicly about the impact, fearing backlash from stakeholders. Some displaced workers are finding employment in the lab-grown diamond (LGD) sector, but industry members warn that LGDs could also face tariff pressures. “LGDs are also heavily dependent on the US market. If the 50 per cent tariff affects them, job losses will rise further,” said Jayantibhai Savalia, chairman (Gujarat region) of the Gem & Jewellery Export Promotion Council (GJEPC) to ET. Dinesh Lakhani, group director of Rs 17,000-crore Kiran Gems, said short-term impacts may include reduced production, temporary layoffs, and shorter shifts. “If order volumes drop sharply, cost-cutting through job reductions may become unavoidable,” he noted. India is the world’s largest diamond exporter, with the US and China being its key markets. In FY25, gems and jewellery exports to the US totalled $10 billion, dominated by cut and polished diamonds. The industry is urging the government to fast-track trade agreement talks with the US, increase export incentives, offer interest subsidies, and speed up GST refunds. Arvind Gupta, MD of Gallant Jewellery, warned that the US accounts for over 25 per cent of its exports. “High tariffs will dent volumes, squeeze margins, and displace thousands of jobs,” he said. While the effects are yet to be fully felt in Surat , India’s largest diamond hub with 800,000 workers , some buyers are already exploring alternative manufacturing bases in Vietnam and Thailand to bypass US tariffs. “If no viable solution emerges, units may be forced into drastic decisions,” said Vijay Kumar Mangukiya, MD of Dhani Jewels.
