Diamonds and rust

There is a palpable pressure within the air. “I’m fearful. Had we even anticipated that heavy tariffs could be imposed in a single day, we might have diversified. But what do I do now? I’ve hundreds of karigars (expert artisans) depending on me. They have been working with me for many years. They have households to maintain, dwelling loans to pay. What do I inform them? Is it not our duty to maintain them?” asks Adil Kotwal, CEO, Creations Gems & Jewellery, an organization primarily based in Mumbai that has a North American buying and selling arm, and has been in enterprise for 25 years.

The anxiousness about an unsure future is written on his face. He is sitting at his manufacturing facility within the Santacruz Electronics Export Processing Zone (SEEPZ) Special Economic Zone (SEZ) in Andheri, Mumbai, in a slim cabin surrounded by different cubicles with males quietly bent over yellow gold. He says over 70% of the jewelry manufactured within the SEZ caters to the U.S. market.

Kotwal is surrounded by studded gold bracelets, necklaces, rings, all ready for his approval. But the sheen of the diamonds within the studded jewelry contrasts with the sunshine in his eyes. “For many years, we have now constructed relationships, catered to the U.S. jewelry market, crafting kinds they like. You can’t make the identical jewelry and promote it in another nation. Here, the provision pipeline is about. But it has been massively disrupted now,” he says.

Until April 2025, plain gold jewelry and studded gold jewelry had a 5%-7% responsibility. There was no responsibility on India’s reduce and polished (pure) diamonds or lab-grown diamonds. From April 9 to August 7, this 12 months, a ten% tariff was imposed on diamonds, which was elevated to 25% on August 8, and was finally elevated to 50% from August 27, 2025. Over 30% of India’s export of reduce and polished diamonds is to the U.S. For plain and studded gold jewelry, tariffs have gone to 55% and 57% respectively.

Losses of many varieties

The buildings throughout SEEPZ’s 110 acres are below a heavy safety watch. No one can enter with out an elaborate verify. Thousands of expert employees stroll in day-after-day to occupy small locations in slim cabins. Armed with a magnifying scope, small weighing scales, and different devices, they slog within the manufacturing facility line to create beautiful designs which promote overseas. Thousands of shipments fly out every day from this complicated to overseas shores. SEEPZ is strategically situated near the worldwide airport, a bit over 3 km away.

“Today, I’ve jewelry sitting prepared in my manufacturing facility able to be shipped, not realizing if the shopper will order it now by paying the upper duties,” Kotwal says. Walmart is the one U.S. importer which has been taking orders by paying the brand new tariffs, he provides.

The Gem and Jewellery Export Promotion Council (GJEPC), an apex trade physique with over 10,000 members, predicts that the full gems and jewelry export to the U.S. from India will lower by 75%. It is at present at U.S. $1,1180.45 million. Business may go to different international locations. After the U.S. imposed 10% tariffs earlier this 12 months, exports plummeted 39%: from US $2,443.642 million within the April–June 2024 to US $1,494.11 million in April–June 2025.

“Countries like Thailand, Vietnam, Dubai, and Turkey would possibly emerge as different locations for the U.S.,” Kotwal says, shrugging his shoulders. He asks angrily if he ought to now domesticate companions in Thailand or Dubai. “Will my employees transfer international locations? They are all expert labourers who draw a very good wage. What else will they do? Will every other trade soak up them? The authorities wants to think about them,” he says, hoping for an intervention.

Kirit Bhansali, chairperson of the GJEPC, says the massive exporters could possibly soak up the shock for some time, however small and medium enterprises will wrestle to remain afloat. Most firms within the sector function on this phase. Small enterprises are these with an annual turnover of no more than ₹100 crore, whereas medium-sized firms are these whose annual turnover shouldn’t be greater than ₹500 crore.

Bhansali, who’s a accomplice at Smital Gems, an organization within the diamond enterprise, feels a method out is to search for companions in different markets. He says carat-wise 97% of the world’s free reduce and polished diamonds come from India. Most diamond export homes in Mumbai have enterprise networks in Surat, Gujarat, the place the gems are processed. The commerce is tightly managed by the boys from households of communities historically concerned within the commerce.

The shine within the diamond commerce

The temper at Mumbai’s Bharat Diamond Bourse, which is the world’s largest diamond trade, with 4,000 diamond merchants, is flat. Many really feel that the U.S. client will finally need to bear the shock of the worth rise.

Dinesh Lakhani has his workplace within the bourse, which consists of 9 linked towers, throughout 2 million sq. toes of Mumbai’s business 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 very best attainable grade for colourless diamonds.

Unlike many others, Lakhani doesn’t really feel defeated. “Is this the primary time we’re confronted with a problem? No. Whether it was the collapse of Lehman Brothers that led to the worldwide disaster in 2008, or COVID (in 2020), we have now at all times emerged stronger. I really feel happy with my diamond trade. We work arduous and discover alternatives in challenges,” he says.

Lakhani is the group director of Kiran Diamonds, the world’s largest exporter of pure diamonds. His firm and the community of family-run firms in each Mumbai and Surat make use of over 50,000 artisans. Every 12 months, Lakhani exports diamonds price U.S. $300–400 million to the U.S. This 12 months his orders have dried up.

“Our asset is our expert labour. That is why we’re primary. And we worth our asset. We will faucet into different markets and attempt to make use of our complete staff,” he says.

Part of the explanation that Lakhani is so calm is as a result of he is aware of that the U.S. importers are going to be impacted and that will trigger some withdrawal of tariffs. Industry insiders say that Indian free diamond exporters labored on a modest margin of 4-6%. Those margins rose to double digits and even to 100% for U.S. importers, as a result of they’re jewelry makers utilizing free diamonds to create items. “Our free diamonds type the uncooked materials for American trade. How will they fulfil the demand of their trade?” Lakhani causes. Also, India has historically prolonged an extended credit score arm to the U.S., permitting funds to come back in even as much as 180 days after the export.

He says the “shine” of the bourse comes from commerce in free diamonds throughout 5 many years with the U.S. The complicated homes customs desks, banks, eating places, testing labs, and journey brokers. Guarded like a fortress, the a number of gates of the bourse have separate entry-exit factors for various individuals. The bourse itself is surrounded by different excessive safety premises like consulates, residences of excessive internet price people, diplomats, company workplaces, and the Jio World Convention Centre.

Anoop Mehta, the president of Bharat Diamond Bourse and proprietor of Mohit Diamonds, feels, “If progress in China picks as much as pre-COVID occasions, the Chinese market can soak up Indian diamonds.” He provides that the bourse has exported $10-11 billion reduce diamonds this 12 months. “This is down from $20 billion in 2020 due to a variety of components. Of the 4,000 workplaces, there are actually only one,200 to 1,500 energetic exporters who function from right here,” Mehta says.

Sabyasachi Ray, the chief director of GJEPC, says there are two methods of trying on the influence: the fast influence and the long-term influence. “The sudden influence has been large and commerce is discovering it troublesome to regulate. When catastrophe strikes, there must be aid. What we wish proper now’s regulatory aid. We don’t need dole. All we ask for is the easing of laws,” he says. He offers examples of this: the easing of situations of export on duty-free gold, which as soon as imported must be made into jewelry and exported inside 90 days after which an obligation is stamped on the merchandise. Or the extension of fee realisation from 9 months to fifteen months, to provide clients some leeway.

The ratna kalakars of Surat

Around 10 lakh persons are employed in Surat’s diamond trade, which has been below extreme pressure for the reason that Russia-Ukraine conflict began, in keeping with Surat Diamond Workers Union vice-president Bhavesh Tank.

Tank explains that Gujarat’s diamond trade has been struggling for over two years, however the true hit can come round Diwali, when the influence shall be felt and important job losses will floor. “Since the Russia-Ukraine conflict started, the wages of diamond employees have been reduce from the sooner ₹1,200–₹1,500 per day to ₹800–₹1,000. I urge the federal government to step in to help ratna kalakars (diamond artists) throughout Gujarat, as a result of 9 out of 10 unpolished and uncut diamonds imported to India are processed right here.”

Some trade leaders, nevertheless, are asking employees to remain calm. “This is a brief part. The U.S. has no viable different to India for free diamonds,” says Jagdish Khunt, president of the Surat Diamond Association. “Yes, tariffs are a setback, however they may finally push up costs within the U.S., and patrons there could have no possibility however to soak up the distinction, since sourcing from India can’t be averted.”

In May, the Gujarat authorities introduced a aid bundle for diamond artisans and small items struggling as a result of world slowdown. Nearly 90,000 employees utilized for support below the scheme, which provides ₹13,500 per baby, to help affected households. However, by July, solely 170 youngsters had acquired help.

During the monsoon session of the Gujarat Assembly, two Congress MLAs raised questions on the particular help bundle. In a written reply to Tushar Amarsinh Chaudhary, the State authorities, run by the Bharatiya Janata Party, stated that by July, it had acquired 70,254 purposes from Surat and one other 3,926 from Ahmedabad. While candidates in Ahmedabad have acquired a complete of ₹24.03 lakh, employees in Surat are awaiting disbursal. In its reply to Jignesh Mevani, the federal government disclosed that it had acquired 13,462 purposes from diamond employees in Botad district and one other 2,306 from Amreli. However, none of those candidates has been compensated thus far. 

vinaya.deshpande@thehindu.co.in

(With inputs from Abhinay Deshpande)

Edited by Sunalini Mathew