Key points
- Orders cancelled, hitting small units in Bhavnagar, Amreli, and Junagadh
- Shift to lab-grown diamonds, but tariff fears persist
- Industry seeks govt support to ease trade and revive exports
ISLAMABAD: Almost 100,000 workers engaged in the diamond cutting and polishing trade across India’s Saurashtra region have lost their jobs since the 10 per cent imposition of the US baseline tariff in April, Gujarat’s Diamond Workers Union vice president Bhavesh Tank said.
The union said the job loss accelerated in the last 10 days, when the tariffs went up first from 10 per cent to 25 per cent and then doubled to 50 per cent, according to The Economic Times.
Last week, President Donald Trump imposed an additional 25 per cent tariff on Indian goods due to Delhi’s continued purchase of Russian oil, bringing the total duty on Indian exports to the US to 50 per cent – among the highest of any American trading partner, according to Reuters.
According to The Economic Times, job losses were mostly in small units located in Bhavnagar, Amreli and Junagadh after many export orders from US customers were either put on hold or cancelled. These units get job work from the larger units for cutting and polishing rough diamonds. “The units spread over Saurashtra, Junagadh, Bhavnagar and Amreli employ 300,000-400,000 people. Business was deteriorating in these places as the US and China’s offtake of diamonds was slow. But the biggest blow came from the US tariff announced in April which created an uncertainty in the diamond trade. Since then, cutting and polishing work has dried up and workers were shown the door,” Tank said. As per the union, these workers get a salary of 15,000- 20,000 per month.
Tight-lipped
Large companies are tight-lipped about the job loss as they fear backlash from the stakeholders. The industry members said some of the workers were getting absorbed in lab-grown diamond (LGD) units, but the outlook on employment remains bleak as that segment, too, could be impacted by tariffs.
Jayantibhai Savalia, chairman (Gujarat region) of Gem and Jewellery Export Promotion Council (GJEPC), said even if the workers are losing jobs in natural diamond cutting and polishing, many are being absorbed by the LGD segment.
“However, if the LGD business gets affected by the 50 per cent tariff, then there will be a lot of problems, and job loss will be quite significant. The US is the major market for LGDs,” he said.
Dinesh Lakhani, group director of 17,000-crore Kiran Gems, one of the leading diamond exporters, said in the short term, tariffs may lead to reduced production, which could result in temporary layoffs or reduced shifts. “If order volumes decline significantly, we may be forced to cut jobs to manage costs,” he said.
Largest exporter
India is the largest exporter of diamonds globally, including to the US and China, which are the largest markets. Around nine out of 10 diamonds available globally are cut and polished in India. In FY25, India exported gems and jewellery worth $10 billion to the US, led by cut and polished diamonds, and diamond jewellery.
The industry has asked the government to urgently complete the bilateral trade agreement discussions with the US to address this tariff disparity, sought increased export incentives, interest subsidies and faster goods and services tax refunds.
Jobs on the line
Arvind Gupta, MD at Gallant Jewellery, said the US accounts for over 25 per cent of its exports, and this sharp escalation in prices due to high tariff, will significantly affect trade volumes, compress margins, and potentially displace thousands of jobs.
To be sure, the effect of job cuts in smaller towns is not yet felt in the diamond hub in Surat, which employs over 800,000 people.
Vijay Kumar Mangukiya, MD at Surat-based Dhani Jewels, said no decision has been taken to ask workers to go. “US buyers are talking to us. They are thinking whether to take the diamonds from India and manufacture the jewellery in Vietnam and Thailand, as the US tariff is less in these countries. If nothing can be worked out, only then will the units be forced to take some drastic steps,” he said, according to The Economic Times.
