India’s gem and jewellery exports rose 2.44% to $9.17 billion between April and July 2026, but the headline number hides a split that matters most in Surat: traditional cut-and-polished diamond exports, the trade the city built its economy on, fell 18.23% in July alone, while lab-grown polished diamonds grew 7.47% and studded gold jewellery jumped 21%, according to figures released by the Gem and Jewellery Export Promotion Council (GJEPC). Silver jewellery exports surged 72% over the same four months, reported by DeshGujarat.
Why the diamond trade is losing ground
Surat cuts and polishes roughly 90% of the world’s diamonds, and that trade has spent the past year absorbing a series of blows: a US tariff regime that briefly offered relief before reinstating pressure on Indian-cut stones, weaker demand from key overseas markets, and a structural shift as consumers, particularly younger buyers in the US, increasingly choose lab-grown diamonds over natural ones for both engagement rings and fashion jewellery. GJEPC chairman Kirit Bhansali said value-added segments were helping the industry withstand global headwinds, a diplomatic way of saying the traditional core of the business is shrinking while newer categories grow around it.
That shift shows up starkly in the July numbers: cut-and-polished natural diamonds, long the backbone of exports from Surat’s diamond bourses and thousands of small polishing units, dropped nearly a fifth year-on-year even as the lab-grown polished diamond category, still a fraction of the natural trade’s size, kept expanding.
What it means for Surat
Surat’s diamond economy employs an estimated 500,000-plus cutters and polishers, many in small family-run units that depend on steady order volumes from exporters. A sustained decline in natural diamond exports does not show up immediately in headline export figures, since studded gold and lab-grown segments are growing fast enough to offset it in dollar terms, but the two trades employ workers differently. Lab-grown diamond cutting and gold jewellery-setting are not simple substitutes for the skills built up over decades in natural-diamond polishing, and a slow reallocation of trade volume toward those newer categories could leave parts of the traditional workforce squeezed even as the industry’s overall export numbers look healthy.
Surat’s diamond units have already been through a rough stretch: the city’s diamond trade lost, then partially regained, US tariff relief earlier this month, a reminder that this is not a one-off dip but a trade navigating both an external tariff fight and an internal shift in what kind of stone the world wants to buy.
Outlook
The GJEPC’s own emphasis on studded gold, silver and lab-grown segments suggests the industry body sees these as the areas worth building around going forward, rather than expecting natural diamond volumes to recover to earlier levels. For Surat, that points toward a slow, uneven transition rather than a sudden collapse: exporters and larger diamond houses appear able to pivot into the growing categories, while the outlook for smaller polishing units tied specifically to natural stones remains less certain and worth watching over the next few quarters of trade data.
Sources: GJEPC, DeshGujarat
This report was compiled and written with AI assistance from publicly reported sources, and reviewed for accuracy.