As global trade tensions reshape supply chains, the diamond sector stands at a crucial crossroads. India and the United States have long been co-dependent partners: India processes over 90 % of the world’s polished diamonds, while the US absorbs a similar share of high-end consumer demand. Yet recent tariff escalations threaten that historic balance.
Tariff Turmoil and Market Strain
Over the past year, the US government raised tariffs on Indian diamond exports up to 50 %, triggering disruption across the supply chain. Industry data shows that exports of polished diamonds from India to the US have fallen by nearly half in value, reflecting cancelled orders and halted shipments.
Impact studies project that Indian cut and polished diamond exports could decline 17–20 % in fiscal 2026 due to the tariff burden, potentially depressing revenue and pushing producers to diversify into other markets or segments. Small and medium manufacturers, especially in hubs such as Surat, have experienced order cancellations and are exploring alternative markets beyond the US.
Why a Trade Agreement Matters
For the global diamond industry to reclaim momentum, a comprehensive India–US trade deal appears essential. Tariffs at current levels make Indian diamonds significantly more expensive for American buyers, undermining competitiveness and eroding demand. A successful agreement could normalize duties, restore smoother flows, and underpin long-term industry health—a point echoed by De Beers’ CEO in the CNBC interview.
Negotiations have been winding and sometimes stalled; recent reports indicate high-level trade talks faltered after diplomatic hesitations, leaving industry stakeholders in limbo.
Beyond Tariffs: Structural Shifts
Trade policy is only one piece of the puzzle. The diamond sector also faces structural shifts:
Lab-grown diamonds are gaining traction, particularly in the affordable and fashion segments. De Beers and partners like Titan are positioning natural diamonds as premium, emotionally resonant alternatives.
Retail and marketing strategies in India are becoming more sophisticated, with major investments in brand stores and consumer engagement.
Global demand patterns, including slower growth in China and Europe, add layers of complexity.
The Path Forward
A favourable trade deal could do more than just reduce costs—it would signal renewed confidence in bilateral economic ties, reassure manufacturers and retailers, and help sustain jobs across India’s vast diamond cutting and polishing ecosystem. With a stronger foundation, brands could accelerate retail expansion and cater to evolving consumer preferences, both online and offline.
However, until such a deal is finalized, the industry will have to balance diplomatic uncertainty, tariff headwinds, and long-term market evolution—even as leaders like Al Cook remain optimistic about India’s enduring role in the world’s diamond story.
