Gujarat’s diamond industry is facing a big crisis after the United States increased import tariffs on diamonds from India.
Since April, when the US first imposed a 10% tariff, about 1 lakh workers in Gujarat’s Saurashtra region have lost their jobs. The situation got worse in the past 10 days when the tariff was first raised to 25% and then doubled to 50%.
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Most job losses have happened in small diamond cutting and polishing units in Bhavnagar, Amreli, and Junagadh. These units usually work for bigger companies but now have very few orders as many US buyers have delayed or cancelled purchases.
According to the Gujarat Diamond Workers Union, the industry was already struggling because of low demand from the US and China, but the US tariff increase has made the situation much worse. Workers in these units typically earned between ₹15,000 and ₹20,000 per month.
While big companies are not revealing how many people they’ve let go, some laid-off workers have found jobs in the lab-grown diamond (LGD) sector. However, experts warn that if the 50% tariff is also applied to LGDs, even more people could lose their jobs. The US is a major market for these diamonds too.
India is the world’s largest diamond exporter, cutting and polishing around 90% of the world’s diamonds. In FY25, India exported $10 billion worth of gems and jewellery to the US, most of it cut and polished diamonds.
Industry leaders are urging the Indian government to speed up trade talks with the US to reduce tariffs, and are also asking for more export incentives, lower interest rates, and faster GST refunds.
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For now, the worst impact is being felt in smaller towns, while the big hub of Surat, which employs over 8 lakh workers, is still stable. But Surat jewellers say US buyers are considering shifting production to countries like Vietnam and Thailand, where tariffs are lower. If that happens, the situation could become even more serious for India’s diamond workers.
