India’s natural diamond industry, battered by global economic headwinds for the past two years and of late punitive US tariffs, is showing the first flickers of recovery. According to Gem and Jewellery Export Promotion Council (GJEPC) data released on October 14, exports of cut and polished diamonds—predominantly natural stones—dipped 9.57 per cent overall to $6.25 billion in the first half of fiscal year 2025-26 (April to September).

Yet, beneath this headline decline is tale of gradual resurgence: a 5.91 per cent uptick in September alone to $1.37 billion, signalling the industry’s pivot away from traditional markets and towards emerging hubs.

The United States, once a crown jewel in India’s export portfolio, has become a thorn. For April-September 2025, overall exports to the US declined 40.28 per cent to $2,770.66 million while exports of cut and polished diamonds fell 53.62 per cent to $1,175.09 million, as compared to same period last year, notes the GJEPC report.

“The sector is under significant stress, and our council is actively engaging with the government to advocate pragmatic, relief-oriented measures, such as deferment of interest on working capital loans, relief in pre-shipment finance, extension of the Interest Equalisation Scheme, permission for reverse job work in SEZs (special economic zones), allowing sales from SEZs to the Domestic Tariff Area (DTA), and provision of liquidity support packages for affected MSMEs (micro, small and medium enterprises),” says Kirit Bhansali, chairman, GJEPC.

Meanwhile, rather than crumble, Indian exporters are sidestepping these barriers with savvy redirection, channelling their gems to friendlier shores where demand is surging. Efforts to develop the affluent United Arab Emirates (UAE) market and revive Hong Kong have given an early fillip to India’s diamond trade.

Shipments to the UAE skyrocketed 65.23 per cent to $1.3 billion, transforming Dubai into a bustling global trading hub for natural diamonds. This boom is fuelled by the UAE’s strategic position as a gateway to Middle Eastern and African markets, where affluent buyers seek high-quality stones amid rising investor confidence in gold and gems as safe-haven assets.

Exports to Saudi Arabia witnessed a growth of 124.1 per cent, reaching $128.90 million. Similarly, exports to Hong Kong climbed 18.08 per cent to $2.057 billion, driven by a rebound in demand from jewellery manufacturers and retailers gearing up for Asia’s festive rush.

The United Kingdom also emerges as a key player, with overall gold jewellery exports (often studded with diamonds) rising 17.01 per cent to $155.5 million, thanks to steady retail appetite and admiration for India’s intricate designs. The broader strategy is diversification away from US dependence towards markets less encumbered by tariffs and more aligned with cultural celebrations.

The timing adds the perfect icing. India’s festive and wedding seasons are ramping up among the diaspora while international holiday shopping of Christmas and New Year spurs demand in hubs like Hong Kong and the UAE. “With global retail markets entering their busiest quarter, we expect the next few months to strengthen export performance further. India’s reputation as a reliable sourcing destination, supported by its craftsmanship and scale, continues to drive international demand,” says Bhansali.

However, during the April-September 2025 period, exports of Polished Lab-Grown Diamonds declined 7.99 per cent to $586.63 million. The per-carat export value during the period stood at $58.66, consistent with global pricing trends amidst increased production and inventory corrections.

After a 40 per cent correction over the last two years, the value of natural diamond held steady in the latest quarter, with diamantaires heaving a sigh of relief in India. “The concern was the sudden shock, just ahead of the festive season. We (the diamond industry) have known the potential of non-US markets, but the bullishness of US markets was sufficient for the industry; so the potential of non-US markets wasn’t explored,” said a diamantaire, requesting anonymity. “The adversity imposed by sudden tariffs has led us to pivot. Developing new markets will take time, though, and government support in the interim is necessary.”

Courtesy : India Today