India’s gems and jewellery industry is bracing for a severe setback as fresh US tariffs threaten the livelihoods of nearly 1.73 lakh workers this festive season. The steep import duties of 25–50% on diamonds and studded jewellery are expected to erode demand, hitting labour-intensive hubs across Gujarat, Maharashtra, and Rajasthan.
According to estimates shared within the trade, exports of natural cut and polished diamonds (CPD) to the US could plunge by almost 80% during the August–November window, falling from last year’s $1.52 billion to just $300 million. This translates into a drop of over 1 million carats in shipments, directly impacting employment for more than 54,000 diamond workers, including those involved in both natural and lab-grown segments.
Until recently, cut and polished diamonds from India entered the US at zero duty, while studded jewellery attracted a 5–7% levy. Now, CPD faces a 25% tariff and jewellery imports as high as 32%, with the possibility of further escalation to 50%. The sudden cost pressures are already forcing international buyers to reassess sourcing strategies.
India remains the world’s largest centre for cutting and polishing diamonds, handling nine out of every ten rough stones globally and employing over 9.5 lakh workers in Gujarat alone. Last year, diamond exports accounted for $13.26 billion—more than 40% of the country’s total gems and jewellery shipments, which stood at $29.9 billion. The US continues to be the single largest market, contributing close to 40% of India’s CPD exports.
The ripple effect of this disruption is expected to hurt not just diamond workers but also thousands of artisans crafting studded jewellery, coloured gemstones, and plain gold, silver, and platinum pieces. Many fear that if trade talks with Washington remain stalled, manufacturing of larger diamonds could shift to hubs such as Israel, even though small-diamond processing—India’s specialty—remains difficult to replicate elsewhere.
In response, industry leaders are urging government support to ease the blow. Demands include targeted reimbursements to offset the additional tariff burden for the August–December period, as well as a six-month moratorium on interest payments for working capital loans. Such relief measures, they argue, are essential to protect jobs and sustain India’s dominance in the global diamond trade during this challenging phase.