US tariff shock hits Gujarat diamond hubs 1 lakh jobs lost

The recent hike in US tariffs on diamonds has triggered a severe employment crisis in Gujarat’s Saurashtra region, with nearly 100,000 diamond cutting and polishing workers losing their jobs since April, according to the Gujarat Diamond Workers Union.According to information,small units in Bhavnagar, Amreli, and Junagadh — which typically handle job work from larger firms — have been hit hardest, as export orders from American buyers are delayed or cancelled. The layoffs have intensified in the past 10 days after the US raised its baseline diamond import tariff from 10% to 25%, and then to 50%.
“The units across Saurashtra, Junagadh, Bhavnagar, and Amreli employ 300,000–400,000 people. The slowdown in US and China demand had already hurt business, but the tariff hike in April created deep uncertainty. Since then, cutting and polishing work has dried up and workers were shown the door,” said union vice-president Bhavesh Tank. He noted that most affected workers earn Rs15,000–Rs20,000 a month.While larger companies have stayed silent on the extent of job losses, some displaced workers have shifted to the lab-grown diamond (LGD) sector. However, industry leaders warn that the impact could worsen if LGDs are also hit by the 50% tariff. “The US is the major market for LGDs,” said Jayantibhal Savalla, chairman (Gujarat region) of the Gem & Jewellery Export Promotion Council (GJEPC).
Dinesh Lakhani, group director at Rs17,000-crore Kiran Gems, said higher tariffs could lead to reduced production, shorter shifts, and temporary layoffs. “If order volumes decline significantly, we may be forced to cut jobs to manage costs,” he cautioned.India, the world’s largest exporter of diamonds, cuts and polishes around 90% of the world’s stones. In FY25, the country exported gems and jewellery worth $10 billion to the US, led by cut and polished diamonds and diamond jewellery.
Industry representatives are urging the government to expedite bilateral trade talks with Washington to bridge the tariff gap, while also seeking higher export incentives, interest subsidies, and faster GST refunds. Arvind Gupta, MD at Gallant Jewellery, warned that higher prices due to tariffs will “significantly affect trade volumes, compress margins, and potentially displace thousands of jobs.”The most severe of the layoffs are being felt in smaller towns, while Surat — employing over 800,000 in the diamond sector — remains relatively insulated for now. Vijay Kumar Mangukiya, MD at Surat-based Dhani Jewels, said US buyers are exploring sourcing diamonds from India but manufacturing jewellery in Vietnam or Thailand, where tariffs are lower. “If nothing can be worked out, only then will the units be forced to take some drastic steps,” he added.

(State Correspondent)