The diamond cutting and polishing industry in Gujarat’s Saurashtra region is in crisis. A steep increase in tariffs imposed by the United States has led to the loss of nearly 100,000 jobs. The tariffs rose from 10% in April to a staggering 50% in August. This change has severely impacted smaller diamond units in Bhavnagar, Amreli, and Junagadh. These small businesses were already struggling due to weak demand from the US and China before the tariffs escalated. Bhavesh Tank, vice president of the Gujarat Diamond Workers Union, shared that many workers, who typically earned between ₹15,000 and ₹20,000 per month, are now being laid off. The situation became critical in the past few weeks as American buyers began to delay or cancel orders. This has left many workers without jobs and uncertain about their future.
Some laid-off workers have turned to the lab-grown diamond (LGD) sector for new opportunities. However, industry leaders warn that LGDs are also dependent on the US market and could face similar tariff challenges. Large diamond companies are reluctant to speak out about the issue. They fear that discussing layoffs could hurt their business relationships. However, they acknowledge that reduced production and shorter working hours may become necessary if orders continue to decline.
India is the largest diamond exporter globally, with the US and China being its top markets. In the fiscal year 2025, India’s gems and jewellery exports to the US were valued at $10 billion. The diamond industry is now pushing the Indian government to expedite discussions with the US to address these tariff issues. They are also calling for increased export incentives, interest subsidies, and faster GST refunds to help struggling businesses.
While the immediate impact on Surat, another diamond hub in Gujarat, has been limited, some buyers are looking to shift their sourcing to Vietnam and Thailand to avoid the high tariffs. This shift could lead to even more job losses if it continues. Industry insiders are worried that if the situation does not improve soon, the ripple effects could extend beyond Saurashtra and impact other regions heavily reliant on the diamond industry.
The loss of jobs in the diamond sector is a significant blow to the local economy. Many families depend on these jobs for their livelihoods. The government is urged to take quick action to prevent further damage to the industry and the workers who rely on it. Without timely solutions, the future of thousands of workers and their families hangs in the balance. The uncertainty in the diamond trade is a worrying sign for many in Gujarat, where the industry plays a crucial role in the local economy. Immediate measures are needed to protect jobs and ensure that India’s diamond industry remains competitive on the global stage.