There is a palpable tension in the air. “I am worried. Had we even anticipated that heavy tariffs would be imposed overnight, we would have diversified. But what do I do now? I have thousands of karigars (skilled artisans) dependent on me. They have been working with me for decades. They have families to take care of, home loans to pay. What do I tell them? Is it not our responsibility to take care of them?” asks Adil Kotwal, CEO, Creations Gems & Jewellery, a company based in Mumbai that has a North American trading arm, and has been in business for 25 years.
The anxiety about an uncertain future is written on his face. He is sitting at his factory in the Santacruz Electronics Export Processing Zone (SEEPZ) Special Economic Zone (SEZ) in Andheri, Mumbai, in a narrow cabin surrounded by other cubicles with men quietly bent over yellow gold. He says over 70% of the jewellery manufactured in the SEZ caters to the U.S. market.
Kotwal is surrounded by studded gold bracelets, necklaces, rings, all waiting for his approval. But the sheen of the diamonds in the studded jewellery contrasts with the light in his eyes. “For decades, we have built relationships, catered to the U.S. jewellery market, crafting styles they like. You can’t make the same jewellery and sell it in some other country. Here, the supply pipeline is set. But it has been massively disrupted now,” he says.
Until April 2025, plain gold jewellery and studded gold jewellery had a 5%-7% duty. There was no duty on India’s cut and polished (natural) diamonds or lab-grown diamonds. From April 9 to August 7, this year, a 10% tariff was imposed on diamonds, which was increased to 25% on August 8, and was eventually increased to 50% from August 27, 2025. Over 30% of India’s export of cut and polished diamonds is to the U.S. For plain and studded gold jewellery, tariffs have gone to 55% and 57% respectively.
Losses of many kinds
The buildings across SEEPZ’s 110 acres are under a heavy security watch. No one can enter without an elaborate check. Thousands of skilled workers walk in every day to occupy small places in narrow cabins. Armed with a magnifying scope, small weighing scales, and other instruments, they slog in the factory line to create exquisite designs which sell abroad. Thousands of shipments fly out daily from this complex to foreign shores. SEEPZ is strategically located close to the international airport, a little over 3 km away.
“Today, I have jewellery sitting ready in my factory ready to be shipped, not knowing if the client will order it now by paying the higher duties,” Kotwal says. Walmart is the only U.S. importer which has been taking orders by paying the new tariffs, he adds.
Adil Kotwal, CEO of Creations Gems & Jewellery, a company based in Mumbai that has been in business for 25 years. He says the jewellery supply pipeline to the U.S. has been massively disrupted after the tariffs were imposed.
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SPL ARRANGEMENT
The Gem and Jewellery Export Promotion Council (GJEPC), an apex industry body with over 10,000 members, predicts that the total gems and jewellery export to the U.S. from India will decrease by 75%. It is currently at U.S. $1,1180.45 million. Business could go to other countries. After the U.S. imposed 10% tariffs earlier this year, exports plummeted 39%: from US $2,443.642 million in the April–June 2024 to US $1,494.11 million in April–June 2025.
“Countries like Thailand, Vietnam, Dubai, and Turkey might emerge as alternative destinations for the U.S.,” Kotwal says, shrugging his shoulders. He asks angrily if he should now cultivate partners in Thailand or Dubai. “Will my workers move countries? They are all skilled labourers who draw a good salary. What else will they do? Will any other industry absorb them? The government needs to think of them,” he says, hoping for an intervention.
Kirit Bhansali, chairperson of the GJEPC, says the large exporters may be able to absorb the shock for a while, but small and medium enterprises will struggle to stay afloat. Most companies in the sector operate in this segment. Small enterprises are those with an annual turnover of not more than ₹100 crore, while medium-sized companies are those whose annual turnover is not more than ₹500 crore.
Bhansali, who is a partner at Smital Gems, a company in the diamond business, feels one way out is to look for partners in other markets. He says carat-wise 97% of the world’s loose cut and polished diamonds come from India. Most diamond export houses in Mumbai have business networks in Surat, Gujarat, where the gems are processed. The trade is tightly controlled by the men from families of communities traditionally involved in the trade.
The shine in the diamond trade
The mood at Mumbai’s Bharat Diamond Bourse, which is the world’s largest diamond exchange, with 4,000 diamond traders, is flat. Many feel that the U.S. consumer will ultimately have to bear the shock of the price rise.
Dinesh Lakhani has his office in the bourse, which consists of 9 connected towers, across 2 million square feet of Mumbai’s commercial Bandra Kurla Complex. He sits amid little heaps of diamonds of yellow and white. “These are D-grade diamonds,” he says, explaining that D is the highest possible grade for colourless diamonds.
Unlike many others, Lakhani doesn’t feel defeated. “Is this the first time we are faced with a challenge? No. Whether it was the collapse of Lehman Brothers that led to the global crisis in 2008, or COVID (in 2020), we have always emerged stronger. I feel proud of my diamond industry. We work hard and find opportunities in challenges,” he says.
A view of the office of Kiran Gems, one of the leading manufactures of natural diamonds at Bharat Diamond Bourse. Kirit Bhansali, the chairperson of the Gem and Jewellery Export Promotion Council, said 97% of the world’s loose cut and polished diamonds come from India.
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EMMANUAL YOGINI
Lakhani is the group director of Kiran Diamonds, the world’s largest exporter of natural diamonds. His company and the network of family-run companies in both Mumbai and Surat employ over 50,000 artisans. Every year, Lakhani exports diamonds worth U.S. $300–400 million to the U.S. This year his orders have dried up.
“Our asset is our skilled labour. That is why we are number one. And we value our asset. We will tap into other markets and try to employ our entire team,” he says.
Part of the reason that Lakhani is so calm is because he knows that the U.S. importers are going to be impacted and that may cause some withdrawal of tariffs. Industry insiders say that Indian loose diamond exporters worked on a modest margin of 4-6%. Those margins rose to double digits and even to 100% for U.S. importers, because they are jewellery makers using loose diamonds to create pieces. “Our loose diamonds form the raw material for American industry. How will they fulfil the demand of their industry?” Lakhani reasons. Also, India has traditionally extended a long credit arm to the U.S., allowing payments to come in even up to 180 days after the export.
He says the “shine” of the bourse comes from trade in loose diamonds across five decades with the U.S. The complex houses customs desks, banks, restaurants, testing labs, and travel agents. Guarded like a fortress, the several gates of the bourse have separate entry-exit points for different people. The bourse itself is surrounded by other high security premises like consulates, residences of high net worth individuals, diplomats, corporate offices, and the Jio World Convention Centre.
Anoop Mehta, the president of Bharat Diamond Bourse and owner of Mohit Diamonds, feels, “If growth in China picks up to pre-COVID times, the Chinese market can absorb Indian diamonds.” He adds that the bourse has exported $10-11 billion cut diamonds this year. “This is down from $20 billion in 2020 because of a number of factors. Of the 4,000 offices, there are now only 1,200 to 1,500 active exporters who operate from here,” Mehta says.
Anoop Mehta, president of Bharat Diamond Bourse, says there is a chance the Chinese market might absorb Indian diamonds if its growth goes back to pre-COVID times.
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EMMANUAL YOGINI
Sabyasachi Ray, the executive director of GJEPC, says there are two ways of looking at the impact: the immediate impact and the long-term impact. “The sudden impact has been massive and trade is finding it difficult to adjust. When disaster strikes, there should be relief. What we want right now is regulatory relief. We don’t want dole. All we ask for is the easing of regulations,” he says. He gives examples of this: the easing of conditions of export on duty-free gold, which once imported needs to be made into jewellery and exported within 90 days after which a duty is stamped on the item. Or the extension of payment realisation from 9 months to 15 months, to give customers some leeway.
The ratna kalakars of Surat
Around 10 lakh people are employed in Surat’s diamond industry, which has been under severe strain since the Russia-Ukraine war started, according to Surat Diamond Workers Union vice-president Bhavesh Tank.
Tank explains that Gujarat’s diamond industry has been struggling for over two years, but the real hit can come around Diwali, when the impact will be felt and significant job losses will surface. “Since the Russia-Ukraine war began, the wages of diamond workers have been cut from the earlier ₹1,200–₹1,500 per day to ₹800–₹1,000. I urge the government to step in to support ratna kalakars (diamond artists) across Gujarat, because 9 out of 10 unpolished and uncut diamonds imported to India are processed here.”
Some industry leaders, however, are asking workers to stay calm. “This is a temporary phase. The U.S. has no viable alternative to India for loose diamonds,” says Jagdish Khunt, president of the Surat Diamond Association. “Yes, tariffs are a setback, but they will eventually push up prices in the U.S., and buyers there will have no option but to absorb the difference, since sourcing from India cannot be avoided.”
In May, the Gujarat government announced a relief package for diamond artisans and small units struggling due to the global slowdown. Nearly 90,000 workers applied for aid under the scheme, which offers ₹13,500 per child, to support affected families. However, by July, only 170 children had received assistance.
During the monsoon session of the Gujarat Assembly, two Congress MLAs raised questions on the special assistance package. In a written reply to Tushar Amarsinh Chaudhary, the State government, run by the Bharatiya Janata Party, said that by July, it had received 70,254 applications from Surat and another 3,926 from Ahmedabad. While applicants in Ahmedabad have received a total of ₹24.03 lakh, workers in Surat are awaiting disbursal. In its reply to Jignesh Mevani, the government disclosed that it had received 13,462 applications from diamond workers in Botad district and another 2,306 from Amreli. However, none of these applicants has been compensated so far.
vinaya.deshpande@thehindu.co.in
(With inputs from Abhinay Deshpande)
Edited by Sunalini Mathew