Surat: In a major trade blow to India, the United States under President Donald Trump has formally imposed an additional 25% tariff on Indian goods, effective August 27, raising total duties to 50% on a wide range of exports. With the imposition of these fresh tariffs, Surat, where over 80% of India’s diamonds are polished, is also affected. However, industry stakeholders believe that the brunt will only be short-term, as India is irreplaceable in terms of diamond production.

Talking to a news agency, President of the Surat Diamond Association, Jagdish Khunt, said, “There will surely be an impact, but this 50% US tariff will only have a short-term effect, not a long-term one. The reason is that no other country can replace India, as we account for 90% of the world’s diamond production (cutting and polishing of natural diamonds). The US will have to remain dependent on India, so I believe the impact will be only short-term.”

He added, “The 25% tariff that was already in effect also had some impact, but business has not stopped, as the tax burden ultimately falls on the American consumer. The gold prices for 100 gm were ₹7 lakh and now ₹10 lakh, yet people are buying it. Similarly, in America, diamonds are part of everyday life, so I believe that while there may be a temporary hit, it will get back to normal soon.”

Another diamond manufacturer said, “Every country has its own policy. We will have to see how it goes. Since the US is a very large market, we may face some challenges due to tariffs, but business will not stop as the tariff will be borne by consumers there. Even with the 25% tariff in effect, the goods we are sending are being accepted and sold, so business will adjust to the 50% tariff in time.”

He added, “The US accounts for 30–35% of our business, with the rest spread across other countries. America is a large market, so there are some challenges, but there are also European nations and Russia where we can sell. The Prime Minister is right in saying that we should not bow down to any country. If this continues, we might have to scale down our business and explore markets in other countries.”

However, the tariff burden comes at a time when the diamond industry has been witnessing a slowdown, leading to job losses in Surat. In the latest development, Kris Diyam Diamond Company of the Katargam area has laid off 80 diamond artisans. The company, which does job work for foreign manufacturers, has reportedly laid off several staff members from each department in the past three days without providing any reason. DeshGujarat