Core Viewpoint - The increase of tariffs on Indian diamond imports to 50% by the U.S. has severely impacted India's diamond industry, leading to significant job losses and a decline in exports [2][3]. Group 1: Impact on the Diamond Industry - The U.S. is India's largest buyer of diamonds, accounting for one-third of India's jewelry export revenue, approximately $9 billion annually [2]. - The tariff increase from 25% to 50% has drastically reduced the competitiveness of Indian diamonds in the U.S. market, resulting in order cancellations and factory shutdowns [2][3]. - The Indian diamond export is projected to decline by 17-20% in the fiscal year 2025-2026, potentially dropping to $11 billion [2]. Group 2: Employment Consequences - The diamond industry in Surat employs over 800,000 workers, many of whom are skilled artisans [3]. - The implementation of tariffs has led to layoffs, with estimates of unemployment reaching between 100,000 to 200,000 workers [3]. - Many affected workers are struggling to find alternative employment due to their specialized skills, leading to increased social instability in the region [3]. Group 3: Market Diversification Challenges - Efforts to shift exports to other markets, such as China, face challenges due to competitive pricing from local synthetic diamond producers [5]. - The Middle East and Europe present some potential, but Indian exporters need to adjust their marketing strategies to penetrate these markets effectively [5]. - The overall outlook for the diamond industry remains bleak, with significant inventory buildup and reduced demand from U.S. buyers [5]. Group 4: Future Strategies and Adaptations - The industry is encouraged to diversify and reduce reliance on a single market, with suggestions for government support in simplifying export regulations [7]. - There is a push for skill training programs to help workers transition to new roles within the jewelry sector or synthetic diamond processing [7]. - The rise of the Chinese diamond industry, with significant growth in local brands and sales, poses a competitive threat to Indian exports [7].

Group 1 - India's diamond cutting and polishing export value fell by 16.8% year-on-year to $13.3 billion in FY 2024-2025, marking the lowest level in nearly 20 years [1] - Total gem and jewelry exports from India dropped from $32.28 billion to $28.5 billion, a decline of 11.7% [1] - The import volume of rough diamonds by Indian processors was reduced by 24.3% to $10.8 billion, indicating a severe loss of market confidence [1] Group 2 - The U.S. imposed a 26% tariff on Indian jewelry exports, leading to increased costs and a significant drop in demand, with many workers in Surat shifting to the textile industry [1] - The traditional partnership between India and the U.S. in the diamond industry has deteriorated, with India previously processing 80% of the world's rough diamonds [1][2] - The U.S. retail sector is facing challenges, including inventory buildup and potential bankruptcies among major retailers due to reliance on imported diamonds [1] Group 3 - China has emerged as a significant player in the cultivated diamond market, leveraging technological advancements such as HPHT and CVD methods to capture a substantial share of global production [2][3] - New diamond brands in China, like Zheguang Diamond, are gaining traction among high-net-worth individuals, offering customized services and high-quality cultivated diamonds [4][6] - The retail penetration rate of cultivated diamonds globally surpassed 18% in 2024, indicating a growing acceptance among consumers [6][7] Group 4 - India's diamond industry is experiencing severe transformation pains, with many small processing factories closing down and larger companies struggling to maintain production efficiency [7] - The current situation in India is described as worse than the 2008 financial crisis, highlighting the urgent need for technological upgrades and brand development [7] - The diamond industry is undergoing a significant reshuffle, with a shift in consumer preferences towards rational purchasing over traditional luxury [9]