Story Highlight
– U.S. imposes 50% tariff on India’s diamond exports.
– 1.7 lakh jobs at risk in diamond industry.
– Gujarat, Rajasthan, Maharashtra are worst-affected states.
– Industry demands policy relief and monetary incentives.
– Urgent government intervention needed for survival.
Full Story
India’s diamond and jewellery sector is facing significant challenges following the recent imposition of tariffs by the United States. The U.S. has enacted a steep 50% import duty on cut and polished diamonds imported from India, while duties on both studded and non-studded jewellery range from 50% to 57%. This has severely disrupted trade that has been established for decades, particularly as India holds the position as the largest global exporter of cut and polished diamonds.
Faced with these difficulties, industry representatives are calling for government intervention to mitigate the impact of these tariffs. The U.S. is the primary destination for Indian diamonds, with exports totaling ₹46,000 crore in 2024-25 alone, alongside ₹23,000 crore worth of studded gold jewellery. The sector employs approximately 820,000 skilled workers, and it is projected that around 170,000 jobs may be at risk due to these tariffs, according to the Gems and Jewellery Export Promotion Council. Furthermore, the majority of exporters in this field—85%—are Medium and Small Scale Enterprises (MSMEs), which are likely to struggle significantly without immediate support.
Key states affected by these developments include Gujarat, Rajasthan, and Maharashtra, where a large share of India’s diamond and jewellery processing occurs. Gujarat is noted for its diamond polishing factories; Rajasthan is known for jewellery manufacturing that includes gems and semi-precious stones; and Maharashtra is a key centre for both studded and non-studded jewellery production.
In light of these circumstances, the industry is requesting several specific policy adjustments. They are advocating for the extension of the export obligation period from 90 days to 270 days for goods destined for the U.S., as many manufacturers are unable to fulfill orders in the current environment. Additionally, they are seeking permission for Special Economic Zones (SEZs) to conduct reverse job work and sell products in the domestic market without incurring the standard duty of 20%.
The industry’s financial demands extend to monetary incentives, which include interest subsidies similar to those provided during the COVID pandemic, temporary export subsidies to the U.S., and assistance for workers through loan restructuring and health scheme inclusion. Other requests involve banking support, liquidity initiatives, and extended financing options to bolster resilience.
The urgency of these appeals is underscored by the long-standing nature of the businesses disrupted by the tariffs, which have operated effectively for nearly five decades. While larger exporters may have more resources to adapt, the smaller entities that form the backbone of the sector are at risk of collapse without timely governmental support. Industry estimates suggest that a comprehensive package of relief measures could amount to approximately ₹500 crore.
“The U.S. accounts for 30% of India’s gem and jewellery exports. Most of this demand is met by MSMEs, which are currently facing critical survival challenges. We require immediate assistance from the government,” stated Kirit Bhansali, chairperson of the Gem and Jewellery Export Promotion Council.