The business of exports of cut and polished diamonds is likely to be affected with US President's trade policies. A negative outlook is also likely to affect India's Diamond cutting and polishing business. It is also likely to disrupt the business of jewelers and karigars (artists) employed in the business.
On Monday, Ratings agency Care Edge published an industry outlook stating how exports of Diamonds, especially cut and polished ones, are likely to witness low margins. The report finds that the industry operating on wafer-thin and single-digit margins is staring at losses. The estimated loss is 17-20 percent or nearly $2.2 billion as per the report. The total value of CPD exports for FY26 has been forecast at $11 billion.
Industry data provisioned by India's Gems & Jewellery Export Promotion Council (GJEPC) too implied of a tepid business.
A chart from Care Edge with GJEPC's dataset. | Care Edge Ratings
CPD exports slid from $24.4 billion to $13.29 billion in FY25. Care Edge's report outlines factors such as rising competition from lab-grown diamonds, global headwinds, and a weak demand from China. Meanwhile, data from ministry of commerce shows that the contribution of America which once was India's largest buyer of Cut and Polished Diamonds at 40% (FY22) has come down to 37% for FY25. However, India's exports to countries such as Hong Kong, UAE, and Belgium have witnessed a jump.
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Ujjwal Patel, Director CareEdge Ratings was quoted in the report saying, "High US tariff is expected to impact scale and weaken profitability and credit metrics. However, the ability to maintain lean inventory levels and low leverage profile will continue to remain a key monitorable."
ARE TRUMP's POLICIES TO BLAME?
US President Donald Trump's series of flip-flops on tariffs and restrictive trade policies have affected not only India's diamond business, but the global industry. In May, the White House announced steep tariffs of 37% on Botswana, an African nation known for its poverty. Although Botswana's exports of diamonds had been sizable, it has remained Africa's least-developed and often-hungry nation (hunger score of 20.7 & Serious as per World Global Hunger Index).
Trump's policies not only endeared him to internet meme-makers but the 'Liberation Day' policies were followed with sharp criticism. The Economist published a detailed report on the tariffs which also found a special mention of Botswana's revised tariffs for an article headlined - "Five Crazy Trump Tariffs you wouldn't believe". After negotiations, Botswana's tariffs were revised to 15 percent in July.
Besides tariffs, low consumer-demand in natural diamonds alongside rising demand of lab-grown diamonds has been blamed for tepid outlook in the CPD category. The interest in artificial lab-grown diamonds has been so intense that De Beers, the world's leading diamantaire, started a focused vertical in the category.
