Surat, April 2025 – In a move sending shockwaves across India’s gem and jewelry sector, the United States has officially imposed a 27% tariff on imports from India, targeting the country’s massive diamond export industry. The hardest-hit city? Surat, Gujarat’s gleaming diamond capital — home to over 80% of the world’s diamond cutting and polishing.
This development threatens to disrupt not only global trade but also the livelihoods of millions of workers who depend on Surat’s diamond ecosystem. Let’s break down how this happened, who’s affected, and what the future could hold.
💎 Surat: The Heart of the World’s Diamond Trade
Nestled on the banks of the Tapi River, Surat is globally recognized as the world’s largest hub for diamond cutting and polishing. It handles more than 90% of the world’s rough diamonds, employs over 800,000 artisans, and contributes billions to India’s export economy.
Surat has long been the pride of Gujarat, boasting high-tech facilities like the Surat Diamond Bourse (SDB), which recently opened as the world’s largest office building — even surpassing the Pentagon.
But the new tariff decision from the U.S. has put this global gem city in a tight spot.
🧾 Why Did the U.S. Impose a 27% Tariff?
The decision by the United States Trade Representative (USTR) to levy a 27% tariff on gem and jewelry imports from India stems from trade disagreements and the removal of India from the Generalized System of Preferences (GSP) back in 2019.
Although there were talks of restoring some trade benefits, the Biden administration opted to increase tariffs to protect domestic manufacturers and reduce dependency on international supply chains — a strategy now impacting Indian exporters directly.
India’s gem and jewelry exports to the U.S. were valued at over $9 billion annually, with Surat contributing the lion’s share.
⚠️ Impact on Surat’s Diamond Economy
The effects of the tariff are already visible:
- Reduced Demand: U.S.-based retailers and importers are reconsidering purchases due to higher costs.
- Production Cuts: Small and mid-size diamond polishing units in Surat have started laying off workers.
- Exports at Risk: With a sudden hike in pricing, Indian diamonds are losing competitiveness to those from Thailand, Israel, and Belgium.
- Uncertainty at SDB: The Surat Diamond Bourse, which was supposed to boost international business, is now under pressure as trade pipelines narrow.
💬 “If this continues for more than 3 months, many small factories will shut down. Thousands will lose jobs,” said Harish Patel, a diamond trader from Varachha Road.
🧑🏭 Workers’ Livelihood in Jeopardy
Surat’s economy thrives on skilled labor, with generations of families relying on diamond jobs. Many units are family-owned or employ artisans who’ve been in the business for decades.
The new U.S. tariffs could leave thousands jobless, particularly in less mechanized workshops that lack global marketing reach or digital trade capabilities.
The local diamond industry also supports ancillary businesses like courier services, machine maintenance, catering, and polishing tools — all now bracing for a slowdown.
📈 Government & Industry Response
India’s Gem & Jewellery Export Promotion Council (GJEPC) has urged the central government to engage with the U.S. and request a tariff rollback or provide supportive policies to exporters.
A proposal is also being discussed to diversify into other markets like the UAE, China, and Europe to reduce dependency on the U.S.
The Gujarat state government has also called for emergency meetings to assess local economic damage and may introduce subsidies, relief measures, or job transition programs for laid-off workers.
💡 What’s the Way Forward?
While the new U.S. tariffs are certainly a blow to the Surat diamond industry, there are a few potential recovery paths:
- Digital Sales: Expanding direct-to-customer online sales can reduce middlemen and compensate for lost margins.
- New Market Expansion: The focus may shift to growing economies in Asia and the Middle East.
- Innovation in Lab-Grown Diamonds: Surat has also been increasing production of lab-grown diamonds, which are seeing high demand in ethical jewelry markets.
- Sustainable Practices: Emphasizing eco-friendly and traceable diamond sourcing could attract new segments of conscious consumers.
🏙 Surat at a Crossroads: From Shine to Struggle?
From dazzling the world with its craftsmanship to now braving global economic headwinds, Surat finds itself at a challenging turning point. While the diamond city has always shown resilience, this latest U.S. policy change has spotlighted its dependence on foreign trade and the urgent need for diversification.
As artisans and business owners brace for the storm, the city’s rich legacy, strong community networks, and evolving infrastructure might still pave the way for a new chapter — one built on innovation, digitalization, and global collaboration.
Stay tuned with SuratUpdates.com for all the latest on this developing story.
📢 Stay Updated with Surat’s Changing Economic Landscape
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