In a narrow street made narrower by rows of parked motorbikes, businessmen sitting cross-legged on the sidewalks or perched on the motorbikes, are conducting business with their clients. The tools of their trade are basic — trays lined in velvet, tweezers, and magnifying glasses. Their wares are anything but.
These men in Surat, a city in the western Indian state of Gujarat, are trading in diamonds, carrying the precious stones wrapped in small squares of colored paper in their shirt pockets. The casualness of the whole operation belies its complexity. Both the sellers and the buyers are seasoned businessmen who can quickly appraise the smallest of diamonds. Deals worth thousands of dollars are sealed over cups of tea ordered from street vendors.
There is an unwritten code of honor among these traders and a slip of paper noting the transaction suffices for credit. No one is a complete stranger here and reputations are built or broken over time. The most trustworthy buyers have access to generous lines of credit.
The increasing popularity of lab-grown, cheaper diamonds, and the banning of diamonds originating from Russia by the European Union and G7 countries have adversely affected the industry. But the biggest recent threat is from U.S. President Donald Trump’s 10% tariffs on imports, including diamonds. An even bigger 27% tariff on Indian exports to the United States has been delayed for 90 days as the Trump administration negotiates trade deals. But even the 10% cut in profits is hurting.
Four out of five of the world’s diamonds are cut and polished in Surat, where generations have known no other skill or trade. Behind the grimy facades of several buildings in the market lie swanky workshops equipped with sophisticated technology to design and cut the raw diamonds arriving from Australia, Canada, Russia and parts of Africa.
Only a small percentage of Surat’s output is absorbed by Indian consumers. The rest is exported to the U.S., the United Arab Emirates, Hong Kong, Belgium and other countries. The U.S. has no diamond mines. But two of the three main institutes for grading the gems are in the United States, and diamonds cross multiple borders before they are finally sold in their finished form.
The United States accounted for about 30% of gem and jewelry exports from India in 2023-24. About half of that was in the form of cut and polished diamonds. The future of this trade is now uncertain, depending on what Trump does about his tariffs.
“If the proposed tariffs are implemented, we may lose about half of our export revenue. We won’t be price-competitive anymore,” said Jigar Patel, treasurer of the Jewellers Association Ahmedabad, based in Gujarat's main city.
