Tariff turmoil hit shipments hard, but new markets and a domestic push offer hope of recovery
India’s gems and jewellery exporters endured a bruising year in the US market in 2025-26, as additional tariffs and prolonged uncertainty disrupted shipments. Exports to the US plunged 45% during the year. But the sector has since shown signs of recovery, with shipments rebounding to 6% growth in the first half of the current fiscal, suggesting exporters are gradually finding their footing amid trade headwinds.
The US accounts for nearly a third of exports from this labour-intensive industry with heavy import content. The slowdown in this key market has also pushed the sector to look beyond it and tap other markets. Some units are also increasing their focus on a thriving domestic market. Industry executives, however, say the additional local business has not been enough to make up for the export shortfall.
45 billion. Uncertainty over US tariff levels compounded exporters’ difficulties and disrupted shipments, especially between August 2025 and February 2026 (see chart). The impact was acutely felt in Surat, India’s diamond-cutting and polishing hub, which processes 90% of the world’s rough diamonds. As US orders dwindled to a trickle in the second half of the last financial year, exporters in the city were forced to look for buyers in other markets.
The pressure persisted through February this year, before shipments began to recover significantly. According to Kirit Bhansali, chairman of the Gems and Jewellery Export Promotion Council (GJEPC), exporters responded by redirecting shipments to markets such as the UAE, Hong Kong, Australia and France. These destinations helped keep overall exports relatively stable, although the loss of US business has yet to be fully offset.
Sanket Patel, director at Greenlab Diamonds, said his company was working to diversify its export markets rather than depend heavily on any one country. “Our aim is to develop sustainable demand across multiple geographies rather than replace one market overnight,” he said. The new markets have helped cushion the slowdown, Patel said. However, for an industry that relies heavily on American consumers, building demand elsewhere is likely to take time.
Shree Ramkrishna Exports, one of India’s leading natural diamond exporters, has expanded its presence in West Asia over the past four years while paying greater attention to the domestic market. “The Indian market continues to offer encouraging opportunities. The expansion of organised jewellery retail across India, growing consumer interest in jewellery, and jewellery companies entering the capital markets through IPOs are contributing to the evolving Indian jewellery ecosystem,” said Shreyans Dholakia, entrepreneur and brand custodian of the group.
Some exporters have also reworked their business strategies to cope with the disruption. Priyal Shankar, director at Shivam Jewels, said the company had worked with overseas partners during the period of peak tariffs, with these partners subsequently exporting diamonds to the US. “The trade is directed towards the US, and it remains the biggest consumer,” he said. Shankar said the company had also modified its stock-keeping units (SKUs) to match changing demand and stepped up its networking efforts.
“We changed the SKUs by gauging people early and increased the networking by making more calls. It was totally new economics. New niches had to come,” he said. A second-generation entrepreneur, Shankar said he had not witnessed a decade in which the industry was free of uncertainty, with one disruption or another recurring over the years. Despite the continuing pressure on natural diamonds, overall exports have begun to show signs of improvement.
Gross exports reached $14.3 billion during April-September 2026, up 3.1% year-on-year, according to GJEPC. September exports rose 9.43% from a year earlier to $2.95 billion, signalling a pickup in momentum. Studded gold jewellery and polished lab-grown diamonds helped support the increase, while natural diamonds remained under pressure, underscoring the uneven nature of the recovery. Dinesh Navadiya, former president of the Surat Diamond Association, said the industry’s ability to adapt remained one of its key strengths.
“People of Gujarat are adventurous. They are not scared of anything. They are prepared,” he said. The challenges, however, vary across segments, with natural and lab-grown diamonds facing different market conditions. As exporters recalibrate their strategies, the key question is whether demand from alternative destinations can expand sufficiently to offset weakness in the US and sustain the recovery.
Sevantibhai Shah of Venus Jewels is optimistic about the longer-term prospects. “Following the government’s decision to allow companies to sell roughs in India, the time is not far away when Surat might become a hub for diamond roughs like it is for cutting and polishing,” said Shah, who was the first person in India to process a diamond of two carats or more. Earlier, diamond companies had to travel to places such as Angola and Dubai to buy rough diamonds.
Shah believes that allowing rough diamond sales in India could help Surat expand its role beyond cutting and polishing into a more comprehensive diamond-trading hub.
