By Staff Reporter
A shadow looms over Surat’s diamond industry as President Trump’s new tariffs darken Diwali celebrations for local businesses. While India prepares to illuminate homes for the Festival of Lights, Kalpesh Patel, a 35-year-old entrepreneur in Gujarat’s diamond capital, faces the grim prospect of shutting down his eight-year-old polishing unit employing 40 workers.
Patel’s small workshop represents 20,000 similar units in Surat that process 93% of the world’s rough diamonds. Industry insiders call Trump’s 50% additional duty on Indian imports “the final nail in the coffin” for this $26 billion trade. “We’ll complete Diwali orders, but what comes after?” asks Patel, his voice heavy with uncertainty.
Already struggling after COVID-19 and the Ukraine war, Surat’s diamond sector employs 2 million workers. Union reports show 80 worker suicides in two years as demand falls in key markets like China. With Diwali approaching, Patel and others wonder if their businesses will survive the new trade barriers.
Trade War Brewing
Analysts identify three key factors behind the tariff hike:
U.S. displeasure over India’s Russian oil imports
Western sanctions on Russian diamonds post-Ukraine war
Denied American access to India’s dairy/agriculture sectors
The move spikes import duties from 2.1% to 52.1%, potentially devastating an industry already reeling from pandemic losses and geopolitical disruptions.