100,000 Indian Diamond Jobs Lost Amidst US 50% Tariff Hike

India's dominant diamond cutting and polishing industry is reeling from the recent imposition of a 50% import tariff by the United States, leading to significant job losses across key regions. The escalating trade friction, which saw tariffs rise sharply through August, has directly impacted the sector responsible for processing nearly 90% of the world's diamonds. This development has triggered widespread concern among industry stakeholders, particularly in Gujarat, the heart of India's diamond trade.

The US tariffs, which began at 10% in April and swiftly surged to 25% before reaching 50% in August, have resulted in approximately 100,000 workers losing their jobs in Gujarat's Saurashtra region alone. Small and medium-sized diamond cutting units in areas like Bhavnagar, Amreli, and Junagadh have been particularly hard hit, with many export orders from US buyers being cancelled or put on hold. This drastic measure by the US is reportedly linked to India's continued purchases of Russian oil.

As India exported gems and jewelry worth $10 billion to the US in FY25, the industry is urging the Indian government to expedite bilateral trade negotiations to alleviate the tariff disparity. Some US buyers are exploring alternative manufacturing hubs in countries like Vietnam and Thailand, where tariffs are considerably lower, further threatening India's market share. The impact extends beyond natural diamonds, with concerns also rising for the burgeoning lab-grown diamond sector.

Adding to the complex landscape of the global jewelry market, gold prices have experienced a substantial surge, climbing approximately 40% over the past year. This significant increase is largely attributed to gold's traditional role as a safe-haven asset during periods of heightened global economic uncertainty and geopolitical tensions. Factors such as a weakening US dollar and aggressive gold purchases by central banks worldwide have also fueled this rally.

The simultaneous challenges in the diamond sector and the sharp rise in gold prices underscore a tumultuous period for the global jewelry industry. This confluence of events, as noted by social media commentator Hilary Parker, represents a "massive news" story that raises questions about the adaptability and future direction of the jewelry market. Parker stated in a tweet, > "80% of the world's diamonds are cut/polished in India, which is getting (already has?) a 50% tariff. Gold prices are up 40% over the past year. I feel like in any other industry this would be massive news.. like WTF are jewelers even doing? What a rollercoaster."