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India’s diamond industry has been thrown into chaos after the US Government announced it will increase tariffs on the country's goods to 50 per cent later this month. | Source: IntraFish/Daniel Torok

Diamond industry faces crisis as Trump raises tariffs

Posted August 12, 2025 | By Samuel Ord

India’s diamond industry has been thrown into chaos after the US Government announced it will increase tariffs on the country's goods to 50 per cent later this month.

Under this framework, tariffs on US imports of Indian products will rise from 10 per cent to 25 per cent before spiking to 50 per cent on 27 August.

India is the world’s largest cutting and polishing centre for diamonds, and the US is the largest importer of polished diamonds. US President Donald Trump previously explained that India’s tariff rate has been set high because of the country’s relationship with Russia.

“Remember, while India is our friend, we have, over the years, done relatively little business with them because their tariffs are far too high, among the highest in the world, and they have the most strenuous and obnoxious nonmonetary trade barriers of any country,” Trump explained in a social media post.

"They have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of energy, along with China, at a time when everyone wants Russia to stop the killing in Ukraine.”

A report from Rapaport News suggested that India’s diamond industry had hoped for a difficult, but manageable, 10 to 15 per cent tariff. Gem & Jewellery Export Promotion Council chairman Kirit Bhansali described the situation as dire.

“It’s a very black day for the gem and jewellery sector. There is no immediate solution,” Bhansali said.

“[A rate of] 25 per cent was also difficult, but this is beyond [our] control.”

The report said that some companies are rushing to ship goods to the US before the tariffs come into effect. A US negotiating team will reportedly visit India later this month.