Leaders of the diamond cutting and polishing industry in Surat, known as the Diamond City, fear major repercussions if the US goes ahead with its proposed additional 25% tariff on Indian imports.

The sector is already covered by an existing 25% duty, and industry representatives say another hike could hit both trade and employment.

While the industry has not yet seen an immediate effect, stakeholders say the impact will be felt in the coming weeks. The sector has already been under pressure for the past three years due to a steep fall in demand and prices of both natural and lab-grown diamonds.

Sanctions on Russian diamonds, an economic slowdown in key markets such as the US and China, and the growing popularity of lab-grown diamonds (LGD) have deepened the crisis.
Though LGD has provided some employment to artisans, job losses in the natural diamond segment forced the state government to roll out a school fee support scheme for jobless workers.

"The market is not showing any major movement at present, but everyone is watching closely. If an additional 25% tariff is imposed, it will have a significant impact on the industry and employment in the city," said Jagdish Khunt, president of the Surat Diamond Association.

The US is India's largest export market for gems and jewellery, accounting for more than $10 billion annually — about 30% of the country's global trade. Nearly half of cut and polished diamond exports are sent to the US, with Surat alone employing about 12 lakh workers.

"The situation can turn challenging for workers. The government must announce a package to support the workforce and industry," said Bhavesh Tank, vice-president of the Diamond Workers' Union, Gujarat.

Industry insiders believe the slowdown in trading will soon hit polishing units. "Trading is already slow, and that will affect polishing activity. Right now, the impact is not visible, but in the next few weeks, demand will dip," said Balu Vekariya of the Ratna Kalakar Vikas Sangh.

Courtesy : TOI