India’s diamond industry, particularly in Surat, home to the Surat Diamond Bourse (the world’s largest office complex), is facing severe distress as U.S. tariffs escalate. Currently, fewer than 250 of the 4,700 offices in the Bourse are occupied, signaling a sharp downturn in business activity despite its grand opening just over a year ago.

The imposition of 50% tariffs by the U.S., effective August 27, threatens to cut off access to India's largest gem and jewellery market, which represents nearly one-third of the country's $28.5 billion annual exports in that sector. With weaker demand and rising costs, orders from U.S. buyers have plummeted. In response, large exporters are exploring relocating parts of operations to countries like Botswana that face lower tariffs, while smaller firms are slashing prices and reducing work hours to cope.

The economic strain casts a shadow on employment, where projections warn of up to 200,000 job losses unless a new trade agreement intervenes. While domestic demand and attempts to penetrate markets in Asia, Europe, and the Middle East offer some relief, competition remains stiff, and the holiday season has not brought the usual uplift in production, with both prices and workforce numbers trending downward.

Highlights at a glance:

• Surat Bourse occupancy is severely low, under 6%, despite being touted as a major trade hub.

• The U.S. continues to be the dominant export market, and the doubling of tariffs poses a direct threat to survival.

• Exports, employment, and order volumes have all declined, prompting companies to adapt or relocate urgently.

• Domestic and alternative export markets offer only partial cushioning; the collapse of major foreign demand casts a long shadow over industry prospects.