The United States is set to impose a staggering 50-percent tariff on Indian goods from 27 August, a move that has sent shockwaves through India's diamond industry. The White House confirmed the new rate, which doubles a 25-percent levy introduced just last week, creating turmoil for a sector that processes over 90 percent of the globe's polished diamonds.
President Donald Trump has framed the punitive tariff as a response to India's procurement of Russian oil. With the US being the most significant export market for its polished stones, the Indian diamond trade faces an unprecedented threat. Dealers report that trading outside of America has effectively frozen as the industry braces for impact, with some firms scrambling to ship goods before the deadline.
Industry leaders have described the situation as dire. Kirit Bhansali, chairman of India’s Gem & Jewellery Export Promotion Council (GJEPC), called it a "black day" for the sector. He explained that while smaller tariffs might have been absorbed across the supply chain, a 50-percent rate is unmanageable. The traditionally thin profit margins in the diamond trade, often around 4-5 percent, mean such a high levy cannot be sustained, threatening the viability of many businesses. Analysts predict the tariff could slash revenues of Indian diamond polishers by a further 20-25 percent this fiscal year.
In Washington, trade bodies are lobbying for an exemption. The Jewelers of America (JA) warned the tariffs would be "detrimental" to US jewellery businesses, stressing that diamonds cannot be sourced domestically. However, some analysts suggest the tariffs may be a negotiating tactic. With a US delegation expected in India for talks, there remains a possibility that the rates could change as negotiations continue. (Photo courtesy: Generic diamond photo from De Beers)
18-08-2025
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