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Indian Diamonds Weighed Down By US Taxes

By Shilpa Dhamija14 octobre 2025

India’s diamond manufacturing industry is under unprecedented strain. Exports are falling and jobs are at risk after the U.S, its biggest buyer, slapped 50% tariffs a month ago with no signs of easing. But is this only India’s problem? How will it impact diamond prices in the U.S?

In the first half of the year, U.S. imported nearly half of its loose diamonds from India and then imposed 50% tariffs on it (Manish Malhotra)

50%

Increase in U.S. tariffs on Indian Gems & Jewellery

29 Bn

Worth of gems and jewellery exported by India worldwide.

51%

Of U.S. diamond imports came from India in Jan to July 2025

Clearly, the U.S is largely dependent on India for its polished diamond supply. Imposing such a high tariff on India is going to impact prices across the board, in the U.S

Edahn Golan, a diamond industry analyst from Tenoris consultancy

Gems and jewellery rank among India’s top five non-service exports, with the U.S. as the single largest buyer.

Jhumkaas from Manish Malhotra Jewellery - over 50 carats of Zambian emeralds and diamonds, showcasing intricate craftsmanship (Manish Maholtra)

For decades, gems and jewellery from India entered the U.S., duty-free, under a ‘preferred trade’ partnership. That changed when the Trump administration returned to power and set off a tariff blitz. Over just eight months, the tariff rates shifted repeatedly, creating confusion and uncertainty, before pausing at 50%, disrupting a supply chain that was forged over half a century.

The U.S launched its tariff blitz in April with a 25% duty on Indian gems and jewellery. In August, it doubled down with another 25%, a punitive action against India for buying Russian oil, bringing total tariffs to 50%.

India polishes 90% of the world’s diamonds and depends heavily on U.S. demand. The U.S, in turn, relies on India as a trusted supplier for its flourishing gems and jewellery industry. So what happens when high tariffs are forced into a perfectly balanced equation of demand and supply, between two of the world's most powerful economies?

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How Steep Tariffs Will Hurt India’s Diamond Industry

In 2025, India exported about $29 billion worth of gems and jewellery, worldwide. Almost one third went to the U.S., and half of which were loose polished diamonds.

Since Covid, the industry has struggled to bounce back as demand in the U.S. and China stayed weak. The rise of Lab-grown stones squeezed demand for natural stones further.

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