Trump Tariffs Cripples Gujarat’s Diamond Industry: Over 100,000 Jobs Lost

US President Donald Trump’s tariffs have dealt a severe blow to India’s diamond cutting and polishing sector. The duties surged from 10% in April to 50% in August, leading to the loss of nearly 100,000 jobs in Gujarat’s Saurashtra region.

Industry experts say job losses have spiked over the past 10 days as tariffs first rose to 25% and then doubled over India purchasing Russian energy. With US customers postponing or cancelling orders, small units in Bhavnagar, Amreli, and Junagadh have borne the brunt.

These units, employing between 300,000 and 400,000 workers, were already struggling due to sluggish demand from the US and China. The April tariff announcement created uncertainty, sharply reducing cutting and polishing activity. As a result, workers earning ₹15,000 to ₹20,000 a month were laid off.

The downturn is sector-wide, but larger diamond firms are reluctant to speak publicly, fearing backlash from stakeholders. While some displaced workers are shifting to the lab-grown diamond (LGD) industry, experts warn that LGDs—also heavily reliant on the US market—are equally vulnerable to the 50% tariff, risking further job losses.

In the short term, the tariff shock is expected to cause a drop in production, temporary layoffs, and shorter shifts. With order volumes falling sharply, companies have little choice but to cut staff.

India is the world’s largest diamond exporter, with the US and China as its key markets. In FY2025, gems and jewellery exports to the US totalled $10 billion, dominated by cut and polished diamonds.

Industry bodies have urged the Centre to fast-track trade talks with Washington, enhance export incentives, provide subsidies, and expedite GST refunds.

Meanwhile, some buyers are already exploring manufacturing bases in Vietnam and Thailand, which face lower tariffs—leaving the livelihoods of 800,000 workers in Surat, India’s biggest diamond hub, hanging in the balance.