India’s gem and jewellery exporters are staring at a grim year-end holiday season after Washington imposed a 50 percent tariff on shipments, a move that could hit more than two-thirds of exports to the US. The tariff, which took effect last week in response to New Delhi’s purchases of Russian oil and weapons, is expected to cut shipments to the US by over 70 percent, industry executives warned.
Shaunak Parikh, vice-chairman of the Gem and Jewellery Export Promotion Council (GJEPC), said the fall would leave a “major dent” in India’s overall exports, with severe consequences for the industry and its 25 lakh-strong workforce. The US is India’s biggest market, accounting for nearly a third of exports worth $9.23 billion in 2024-25.
India dominates the global diamond trade, cutting and polishing 90 percent of the world’s rough stones. But exporters say orders have already slowed in recent years due to the US-China trade war, the Ukraine conflict, and growing demand for cheaper lab-grown diamonds. The latest tariff, combined with record gold and silver prices driven by a weaker US dollar, has only worsened the pressure.
Factories in Mumbai’s special economic zones are reporting no new orders for the next two months, leaving capacity idle and costs rising. More than 1,00,000 jobs may be at risk. Sanjay Kothari, director of Diatrendz and former GJEPC chairman, warned of a “cascading impact” on jobs in Surat and Mumbai, where 80 percent of the world’s diamonds are processed.
Although US retailers had stocked up ahead of the festive season, fresh orders have collapsed. Some American importers are advising Indian partners to hold shipments in the hope of a trade deal. But Kothari cautioned that even if an agreement comes, “this peak festive season is gone for us.”
Exporters are now seeking alternative markets in Europe and the Middle East, though Parikh admitted a 25–30 percent fall in overall exports this year is inevitable. “You cannot replace demand from such a large destination in the short term,” Kothari added, noting it could take a decade to establish another market of similar scale.
The broader US economic slowdown is also a concern. Economists warn that weaker consumer demand, reflected in slower job growth and a rising unemployment rate, will compound the pressure. “It means the US economy is also suffering because of tariffs. Under the circumstances, there will be an impact on our supplies as well,” said Biswajit Dhar of Delhi’s Council for Social Development.
