The Fading Golden Era of India’s Diamond Industry

For decades, the diamond cutting and polishing sector in western India was more than just a job for thousands—it was a ticket to a better life. Families relied on income from the trade to invest in their children’s future, especially education. But the recent US tariff hikes on Indian diamond exports are turning that hope into hardship.

What’s the Real Impact of the US Tariffs?

As of December 2025, the US has increased tariffs on Indian diamond goods by roughly 15%. This significant cost boost has made Indian products less competitive in the crucial US market. As a result, order volumes have plummeted, factories are downsizing, and layoffs are becoming widespread.

The ripple effects are staggering. Over a million workers tied to the diamond sector—directly or indirectly—face shrinking income. For many families already living on tight budgets, the immediate cutbacks hit their children’s education hardest. School fees, books, tutoring—all are becoming unaffordable luxuries, forcing youth to abandon studies or drop out entirely.

Shattered Dreams: The Human Side of Economic Pressure

The heart of India’s diamond industry lies in Gujarat, where many households depend solely on this trade. The pressure to make ends meet pushes children out of classrooms and into premature labor, creating a vicious cycle that’s hard to escape.

Experts warn this tariff environment may persist for years, meaning the educational setbacks could saddle an entire generation with fewer opportunities unless governments step in.

Looking Ahead: Diversification and Policy Responses

In response, diamond exporters in India are scrambling to diversify, exploring markets in Europe and the Middle East to reduce dependence on the US. Yet, breaking into these markets is tough—they’re competitive and expensive to enter.

Meanwhile, calls grow louder for government intervention to provide educational support and social safety nets for affected families. Without such help, the damage to human capital could deepen, putting the industry and community’s long-term resilience at risk.

Ultimately, the US tariffs have plunged India’s diamond industry into a deep freeze, directly hitting livelihoods and children’s education dreams. This crisis goes beyond economics—it’s about preserving futures. Stakeholders must carefully weigh these policies’ societal costs and seek solutions that protect both the workforce and their families’ futures.