US Tariffs Shatter Surat's Diamond Industry

Surat, India's renowned diamond capital, is grappling with one of its most severe downturns in recent years. The imposition of US tariffs on Indian diamonds has sent shockwaves through the industry, resulting in widespread job losses, factory closures, and a drastic reduction in worker incomes. The crisis is particularly acute in the Katargam region, a major center for diamond cutting and polishing.

India's diamond exports to the United States, a traditionally strong market, have seen a steep decline. In 2023, exports were valued at $5.93 billion, dropping to $4.88 billion in 2024, and further falling to $2.42 billion as of September 2025. Industry experts attribute this sharp fall primarily to the retaliatory tariffs imposed by the US, making Indian diamonds less competitive. Consequently, manufacturers are facing reduced orders, accumulating inventory, and strained cash flows, compelling them to scale back their operations.

The impact on the workforce has been devastating, with estimates suggesting over 1.5 lakh diamond workers in Surat have lost their employment since the tariffs took effect. Many remaining workers are facing reduced hours or significantly lower wages. While some companies are exploring lab-grown diamonds and new export markets, the lower profit margins and current market conditions offer limited relief. The industry is now seeking government intervention and diplomatic engagement with the US to alleviate tariff pressures and stabilize the sector.