Let us see about US-INDIA Cut and Polished Diamonds and Gems Trade below in detailed.
India and the US share a strong bond in the trade of cut and polished diamonds and gems. Workers in India shape rough stones into shiny jewels that Americans love for rings and necklaces. However, new US tariffs under President Trump create big challenges right now. First, let’s dive into this topic step by step. You will understand how this trade works, why it matters, and what happens next. Moreover, this story affects jobs, prices, and families on both sides.
What Are Cut and Polished Diamonds and Gems?
Cut and polished diamonds start as rough rocks from mines. Skilled workers in India cut, shape, and polish them to sparkle. Gems include colorful stones like rubies and emeralds too. India handles 90% of the world’s diamond polishing in places like Surat. For example, a rough diamond arrives, and experts turn it into a perfect gem for jewelry. As a result, the US imports over half of these from India. Therefore, this trade links factories in India to shops in America.
Furthermore, gems add beauty with colors. India polishes sapphires and emeralds as well. Buyers in the US pick these for special gifts. On top of that, quality from India stands out because of years of skill.
History of the US-India Trade
India entered the diamond world in the 1960s. Then, low costs and fast workers drew business from the US. By the 2000s, exports hit billions. For instance, in 2023, India sent $5.93 billion worth to the US. Businesses ship from Mumbai ports to New York jewelers. However, growth slowed in 2025 due to tariffs. Still, this trade built jobs for millions. Consequently, both countries grew rich from it.
Additionally, gems trade followed the same path. India sources rough gems from Africa and polishes them for US markets. Thus, partnerships formed over decades.
Key Trade Statistics
Numbers show the trade’s size clearly:
- India exported $13 billion in polished diamonds globally in 2024, with 50% to the US.
- US imports dropped 18% in 2024 to $4.88 billion.
- By late 2025, exports halved to under $3 billion due to 50% tariffs.
- Gems like emeralds saw 10-15% trade growth before tariffs hit.
These facts highlight the drop. Moreover, Surat factories felt the shock first. As a result, everyone watches for recovery signs.
Impact of US Tariffs
President Trump added 50% tariffs on Indian diamonds in late 2025. Before, costs stayed low, so trade thrived. Now, Indian gems cost double in the US. For example, De Beers reports exports halved overnight. Factories shut down, and 150,000 jobs vanished in Surat. However, India still polishes 90% of global diamonds. Therefore, the US struggles to find replacements.
Transitioning smoothly, tariffs also hit gems. Prices for polished rubies rose 20-30%. US buyers pay more or skip purchases. On the other hand, small jewelers suffer most.
Job Losses in India
Surat turns quiet as factories close. Workers who cut gems for 10 hours daily now hunt for food stalls jobs:
- 1.5 lakh people lost steady pay.
- Families skip school fees and sell gold.
- Kids drop out to help at home.
Moreover, skilled polishers train for years, but idle hands lose sharpness. However, some shift to jewelry making. As a result, pain spreads to villages.
Effects on US Consumers
Shoppers in America face higher prices. A $2,000 ring now costs $3,000. Jewelers stock less and raise tags. For instance, lab-grown options gain fans, but natural diamonds shine less. Additionally, holiday sales dropped 15%. Therefore, couples delay weddings.
Furthermore, big chains like Tiffany push local sources. Yet, India’s quality beats most. Consequently, US brands lose sparkle options.
India’s Response Strategies
India fights back with smart moves:
- Government gives aid to factories.
- Talks start for zero-tariff deals with Trump.
- Push sales in India—demand up 11% as rich buy more.
Also, exporters eye China and Europe. On top of that, lab-grown gems grow fast in India. Thus, jobs shift slowly.
Moreover, gem trade diversifies. India polishes more for Middle East buyers. Therefore, home market saves the day.
Rise of Lab-Grown Diamonds and Gems
Machines make lab diamonds in weeks, not millions of years. India leads here too, but tariffs hit 27-50%. Prices rise 15%, yet they cost less than natural ones. For example, a lab ring saves $1,000. Factories switch lines to survive. However, natural gems still rule weddings.
Additionally, lab gems come in colors like pink sapphires. US youth pick them for trends. As a result, trade adapts.
Future Outlook and Deals
Experts predict ups and downs in 2026. Rapaport sees cautious starts. Trump hints at deals for zero tariffs. India ramps trade talks. Moreover, De Beers opens 25 stores in India. Therefore, balance returns if leaders agree.
On the flip side, global slowdown lingers. Yet, Asia demand grows. Consequently, hope shines bright.
Challenges for Businesses
Supply chains break easily:
- Rough diamonds pile up from Russia bans.
- Small firms lack cash for stockpiles.
- Quality dips from rushed new sources.
However, big players negotiate direct. Thus, survivors thrive.
Why This Trade Matters to Everyone
Diamonds and gems spark joy, but trade feeds families. India creates jobs; US gets beauty. Tariffs hurt both, but talks fix it. For instance, one deal saves 100,000 jobs. Moreover, lower prices help dreamers buy rings. Therefore, watch news closely.
Tips for Buyers and Sellers
Buyers, act smart:
- Compare natural vs. lab prices.
- Ask for Indian gems—best value.
- Buy now before more hikes.
Sellers, pivot fast:
- Build US contacts for deals.
- Sell local in India.
- Train for lab tech.
These steps guide you through chaos.
Government Roles
US pushes “America First” with tariffs. India offers incentives:
- Tax breaks for exporters.
- Skill programs for workers.
- New trade pacts.
Both act now. As a result, recovery speeds up.
