\u201cWe still have some orders for Diwali and will try to complete them,\u201d he told Al Jazeera.<\/p>\n
Diwali, arguably India\u2019s single biggest festival, scheduled for late October this year, usually sees domestic sales of most goods soar. \u201cBut we might have to shut the business even before the festival, as exporters might cancel the orders due to high tariffs in the US,\u201d Patesh said.<\/p>\n
\u201cIt is becoming increasingly difficult to pay the salaries and maintain other expenses with falling orders.\u201d<\/p>\n
He is among the 20,000-odd small and medium traders in Surat, known as the \u201cDiamond City of India\u201d, which together cut and polish 14 out of every 15 natural diamonds produced globally.<\/p>\n
The US is their single largest export market. According to the Gem and Jewellery Export Promotion Council (GJEPC), India\u2019s apex body for the industry, the country exported cut and polished gems worth $4.8bn to the US in the 2024-25 financial year, which ended in March. That is more than one-third of India\u2019s total exports of cut and polished diamonds, at $13.2bn over the same period.<\/p>\n
Dimpal Shah, a Kolkata-based diamond exporter, told Al Jazeera that orders have already started getting cancelled. \u201cBuyers in the US are refusing to offload the shipped products, citing high tariffs. This is the worst phase of my two-decade-old career in diamonds.\u201d<\/p>\n
![\"kalpesh](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/08\/IMG-20250806-WA0011-1755048551.jpg\")
Kalpesh Patel, who runs a diamond cutting and polishing business in Surat, Gujarat, fears that he may not be able to continue his business for long, because of US tariffs on Indian imports [Photo courtesy of Kalpesh Patel]US imposes penalty<\/p>\n
A 25 percent reciprocal tariff on all Indian goods, which Trump announced on April 2, came into effect on August 7, after talks between the two countries<\/a> failed to yield a trade deal by then. Negotiations are continuing.<\/p>\n Meanwhile, on August 6, Trump announced an additional 25 percent tariff, taking the total tariff rate to 50 percent. He termed the additional tariff that would come into effect from August 27 as a penalty for India\u2019s continued buying of Russian oil, as the US president tries to push Moscow into accepting a ceasefire in Ukraine.<\/p>\n For the gems industry, which already faced a pre-existing 2.1 percent tariff, the effective tariff now amounts to 52.1 percent.<\/p>\n Ajay Srivastava, the founder of Global Research Trade Initiative (GTRI), a trade research group, termed the Trump government\u2019s additional hike as an act of \u201chypocrisy\u201d<\/a>, citing how the US itself continues to trade with Russia, and how China \u2013 Russia\u2019s biggest oil buyer \u2013 faces no similar penalty.<\/p>\n \u201cTrump is targeting India out of frustration as it refused to toe the US line on the Russia-Ukraine conflict, and for its refusal to open its agriculture and dairy sector,\u201d he added, referring to broader ongoing trade talks and differences over US demands for greater access to critical Indian economic sectors.<\/p>\n Yet, whatever the reasons for Trump\u2019s tariffs, they are hurting a diamond industry already bleeding from multiple hits.<\/p>\n More than 2 million people are employed in diamond polishing and cutting units in Surat, Ahmedabad and Rajkot cities in Gujarat \u2014 and many have already suffered salary cuts in recent years, first because of the COVID-19 pandemic, and then Russia\u2019s full-scale invasion of Ukraine.<\/p>\n \u201cThe pandemic led to economic slowdown affecting the international markets in Hong Kong and China,\u201d Ramesh Zilriya, the president of Gujarat\u2019s Diamond Workers Union, told Al Jazeera. The \u201cWestern ban on rough diamond imports from Russia<\/a> due to the Russia-Ukraine war and the G7 ban on Russia also affected our business\u201d, he added.<\/p>\n Russia has historically been a major source of raw diamonds.<\/p>\n Zilriya claimed that 80 diamond workers have died by suicide over the past two years because of this economic crisis.<\/p>\n \u201cThe situation in the international market led to the wages of the workers getting halved to approximately 15,000-17,000 rupees ($194) per month, which made survival difficult in the face of rising inflation,\u201d he said.<\/p>\n Once the Trump tariffs fully kick in, Zilriya fears that up to 200,000 people in Gujarat may lose their livelihoods.<\/p>\n Already, more than 120,000 former diamond sector workers have applied for benefits. A 13,500-rupee ($154) allowance per child, to support their families, was promised in May by the state government to those who have lost jobs due to the tumult in the sector in recent years.<\/p>\n![\"Gujarat](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/08\/IMG-20250805-WA0035-1755048666.jpg\")
India supplies almost all of the world\u2019s cut and polished diamonds, produced in small units across the state of Gujarat [Photo courtesy Ramesh Zilriya, president of the state\u2019s Diamond Workers Association]Diamond sector badly hit<\/p>\n
![\"Kurjibhai](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/08\/AP24044502766314-1755049286.jpg\")
A worker checks the polishing of a lab-grown diamond\u00a0 in Surat, India, Monday, February 5, 2024 [Ajit Solanki\/AP Photo]Decline in exports<\/p>\n![\"A](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/08\/AP25141495170131-1755049407.jpg\")
A salesperson shows a diamond ring to a prospective buyer at a jewellery shop in Ahmedabad, India, on April 14, 2025 [Ajit Solanki\/AP Photo]A domestic solution?<\/p>\n