Major hubs reel as US tariffs dull Gujarat’s diamond shine
Updated: Aug 31st, 2025
Surat’s diamond sector, a global hub employing lakhs of artisans, has faced repeated blows over the past five years. From the Covid-19 pandemic in 2019–20 to the Russia–Ukraine war in 2022, each crisis has eroded stability. The rise of lab-grown diamonds and the Israel–Palestine conflict further disrupted demand. Now, in 2025, the United States’ decision to impose a 50% tariff on Indian diamonds has intensified pressure on Gujarat’s industry.
Job losses across Gujarat
The diamond trade sustains an estimated 15 lakh workers across the state. Of these, nearly 5,00,000 have permanently lost employment, while over 3,00,000 have shifted to other occupations.
In Surat, home to around one million diamond workers, firms are announcing mass layoffs. Around 1,50,000 workers have been told not to return to work indefinitely. Ahmedabad and Saurashtra together account for another 5,00,000 workers, many of whom are directly affected. Smaller hubs in Bhavnagar, Amreli, and Junagadh have seen about 1,00,000 job losses.
Workers seek alternatives
With diamond orders shrinking, many artisans are moving to other trades. In Surat, workers are shifting to textiles, embroidery, agriculture, or even cloud kitchens. Industry estimates suggest that just the announcement of US tariffs has directly impacted around 3,00,000 jobs.
Some remain hopeful that if tariffs are revised, the market may recover. But experts caution that if the downturn deepens, as much as 90% of jobs in the jewellery industry could be at risk.
Palanpur and Ahmedabad face downturn
Palanpur, a long-time hub of diamond entrepreneurs, is reporting reduced production. Ahmedabad’s jewellery showrooms and processing units are also witnessing direct and indirect job losses.
The city had already experienced a transition, as many workers moved from natural to lab-grown diamond units. Now, with reduced orders due to tariffs, the market is again in decline.
Factories run at minimum capacity
In Surat, the entry of lab-grown diamonds had already led to staff cuts of up to 70% in some units. Current production is running at barely 10% capacity. To compensate, traders are exploring alternative markets in Dubai, Europe, Latin America, and within India.
Industry insiders say, however, that it will take considerable time for Gujarat’s diamond sector to reduce its reliance on US demand.
How many diamond artisans lost jobs in six years?
| Year | Jobs lost | Shifted to other trades | National/global crisis impact |
|---|---|---|---|
| 2020 | 1,50,000 – 2,00,000 | 1,00,000 – 1,40,000 | COVID lockdown heavily impacted small units |
| 2021 | 50,000 – 80,000 | 30,000 – 40,000 | Post-COVID slowdown reduced diamond demand, 30% job impact |
| 2022 | 15,000 – 30,000 | 10,000 – 20,000 | Russia–Ukraine war + influx of lab-grown diamonds led to mass migration in Saurashtra |
| 2023 | 30,000 – 50,000 | 20,000 – 35,000 | Russia–Ukraine + Israel war forced 60,000 workers to return to hometowns in Saurashtra |
| 2024 | 50,000 – 60,000 | 30,000 – 40,000 | Lab-grown competition + global slowdown caused 71 suicides, 50,000 jobs lost in 18 months |
| 2025 | 1,00,000 – 2,00,000 | 70,000 – 140,000 | US tariffs could cost over 200,000 jobs, revenue down 30% |
| 2026* | 50,000 – 1,00,000 | 30,000 – 70,000 | If Trump’s tariffs continue, even deeper impact is likely |
