Diamond Trade in Turmoil as US Announces 50% India Tariffs 

The US will increase tariffs on Indian goods to 50% starting later this month, President Donald Trump said Wednesday — a move that has sent the diamond industry into crisis. 

The duty will double the 25% rate Trump announced last week, according to a statement on the White House website. 

Under this new framework, tariffs on US imports of Indian products will rise from the current rate of 10% to 25% on Thursday, then to 50% on August 27. 

The series of announcements has shocked the diamond industry, since more than 90% of polished stones undergo manufacturing in India. Polished trading outside the US has frozen as the sector stands to lose its most important export market, dealers said. Some companies are rushing to ship goods to America before the higher levies go into effect. 

“It’s a very black day for the gem and jewelry sector,” Kirit Bhansali, chairman of India’s Gem & Jewellery Export Promotion Council (GJEPC), told Rapaport News on Wednesday. “There is no immediate solution.” 

Had tariffs been in the 10% to 15% range, it might have been possible to mitigate the effects by having each member of the supply chain take a small hit on margins, Bhansali explained. “But that plan is over. [A rate of] 25% was also difficult, but this is beyond [our] control.” 

Trump described the latest tariff as a punishment for buying Russian oil. He had hinted at such a move in a July 31 post on the Truth Social platform, where he appended the threat of an unspecified additional “penalty” on India to his announcement of 25% tariffs. 

The fragility of margins in the loose-diamond trade makes even the 25% rates unworkable, said a New York-based dealer on condition of anonymity.  

“We don’t even make half that amount in margin,” he said Tuesday, before Trump declared the 50% duty. “This is too much. I am hoping the US trade delegation will come to a more amenable situation.” 

A US negotiating team will reportedly visit India later this month for further talks. 

Image: Indian and US fists colliding. (Shutterstock)