Kalpesh Mangkiya, sitting in front of a rough mountain of diamonds laid out on faded velvet trays, said his cutting and refinement ventures in the Indian city of Surat struggled even before Donald Trump’s trade war deepened his lament.
The owner of Kushal Gems was already forced to fire a quarter of his staff with more than half of his income, as it is part of the cause of Western sanctions on Russian diamonds. In competition with gems grown in cheaper labs, demand from the world’s largest diamond markets, the US and China, was a further complication.
Currently, Trump’s blankets are threatening greater disruption unless the 10% tariff on imports and the possibility of additional collection in India, which handles 90% of the world’s diamonds, can hit a deal between New Delhi and Washington.
“Taxes affect us. Demand will drop,” Mangkiya said in his office. A TV monitor streamed footage from the cramped workshop next to it.
“I don’t think things will improve much in the next few months,” he added. “It’s not fun to do business.”
The pessimistic outlook reflects India’s vast diamond processing industry (one of the country’s best export sectors) and the deep crisis in electronics and medicines employing over a million people.
Many are based in Surat, a riverside city in Gujarat that became the hub of jewellers who fled Burma (now Myanmar) after the Japanese invasion during World War II.
According to the government-supported Council for Promotion of Gem Exports (GJEPC), cut diamond exports, which account for almost half of India’s gem and jewelry shipments, have fallen 17% per year, down over $13 billion a year.
More widely, diamond traders warn that the global $82 billion industry is based on a halt due to Trump’s policy, reaching about a seventh of its normal level through Antwerp’s gem trading center.
The tariffs from the US, which is about a third of India’s processed diamonds, are “another blow to the sector,” said Ujjwal Patel, associate director of Indian assessment and analysis group Careedge.
The exact impact of tariffs on the industry was “unclear,” but the uncertainty was sufficient to paralyze India’s trade, he added.
Surat’s processors and intermediaries are struggling to move large construction stocks.
“There was no stability last year,” said his uncle next to him, who had been in business for 40 years, inspected the glittering piles of stone through an expanding loop. “We’re waiting. We’re not receiving new orders.”
The recession had a deep social and economic impact on Surat, the second largest city in the western state, the political hub of Prime Minister Narendra Modi.
According to Diamond Trade Union Gujarat, an estimated 50,000 artisans have lost their jobs in the last 12 months, with over 60 people struggling to increase their debt, resulting in more than 60 people committing suicide and death.
“Our industry is struggling,” said Babeshtank, the union’s vice president. “When there were no customs duties, there were already major issues.”
India, the world’s most populous country, is a predominantly driven economy with less export dependency than its many Asian peers. However, Modi, one of the first foreign leaders to visit Washington’s US president after taking office, rushed to appease the Trump administration.
On his visit to India last month, US Vice President JD Vance had warm words about Modi and the relationship between the two countries, praising what could be called “very good progress” in a potential trade deal.
“I think it’s important for the next three to six months to see how the overall tariff situation evolves,” said Shaunak Parikh, vice-chairman of GJEPC. “Post something we believe should get some stability,” he added.
The Indian government was “working very hard,” he continued. “We’re very excited.”
On the floor of a sweaty workshop at Kushal Gems, many workers said they knew their colleagues who had lost their jobs.
But mostly they held their heads down and few paid much attention to the global turmoil caused by Trump’s executive order.
“We don’t know about tariffs,” said Kazabaimana, 46, who had been grinding stones since he was a teenager. “We’re just doing our work, God offers.”
However, much of the upper class of India’s diamond industry has lagged behind the risk of relying on the US, according to Amitkorat, vice-president of the Surat Jewelry Manufacturers Association.
Indian exporters were now trying to strengthen their businesses in other markets, including Europe, the Middle East and within India, he said.
“The order from the US is pending,” Korat added, expressing deep concern about the future of Surat and its workers. “These tariffs have a direct impact on their lives. They are not privileged people.”
