New US tariffs on cut and polished diamonds have triggered mass layoffs across the US tariffs India diamond industry, affecting nearly 400,000 workers in Gujarat’s hubs. On Monday, December 9, 2025 reports confirm exports plunged 27.6 percent in the year to March 2024, with further drops linked to 50 percent duties imposed in August. Families now face Surat diamond workers unemployment, pulling children from education amid economic strain.
This crisis strikes at the heart of South Asia’s gem trade, where Surat processes 80 percent of global diamonds and supports migrant labour from rural Gujarat and beyond. The fallout threatens generational progress, as job losses force returns to villages and disrupt schooling for thousands of children. With India’s diamond exports vital to bilateral trade, the tariffs exacerbate tensions in US-India relations, hitting low-wage workers hardest and risking broader regional instability in labour-dependent economies.
Surat Diamond Workers Unemployment Hits Record Highs
Workers in Surat’s vast polishing units report severe Surat diamond workers unemployment since the US tariffs India diamond industry took effect. Alpesh Bhai, a former polisher, lost his job after his unit cut 60 percent of staff. “Earnings fell from 35,000 rupees monthly to nothing,” he said. Now loading textiles for 12,000 rupees, Bhai embodies the shift from skilled gem work to survival labour.
Gujarat government data reveals the scale. Nearly 90,000 applications flooded in for a May 2025 aid scheme covering school fees up to 13,500 rupees per child annually for unemployed polishers with three years’ experience. By mid-September, officials disbursed 82.8 million rupees to 6,368 children, mostly in Surat where 74,000 requests originated. Yet 26,000 claims faced rejection over “improper details,” leaving families in limbo.
The Gem and Jewellery Export Promotion Council (GJEPC) attributes the slump to US measures targeting Russian-sourced rough diamonds, which supply one-third of Surat’s input. Exports to the US, India’s top market, halved post-tariffs, per commerce ministry figures. Small units, employing 700,000 artisans, shuttered en masse, with over 100,000 jobs lost in Saurashtra alone by August.
Bhavesh Tank, vice-president of the India Diamond Workers Union, called for urgent intervention. “The helpline logged 5,000 calls since November 2024, with education topping concerns,” he stated in a union release. Suicides among workers reached 71 by November 2024, underscoring mental health tolls from Surat diamond workers unemployment.
School Dropouts Surat Tariffs: Families Sacrifice Education
The US tariffs India diamond industry ripple extends to classrooms, fueling school dropouts Surat tariffs. Over 600 students quit mid-session last year in Varachha, Surat’s diamond core, as parents returned to villages. Government schools in Saurashtra absorbed the influx, but quality gaps persist: only 23.4 percent of grade three pupils in state facilities read at grade two level, versus 35.5 percent in private ones.
Shyam Patel, 35, exemplifies the heartbreak. His polishing unit closed in August, prompting a move to Banaskantha. His son, in high school final year, dropped out after four months to aid cotton fields. “Government schools reject mid-term returns,” Patel noted. Union estimates peg total dropouts at thousands since January 2024, with 2,000 leaving Surat Municipal Corporation schools in hubs like Katargam.
Kishor Bhamre, director at education NGO Pratham, highlighted adjustment woes. “Children lose peers and urban exposure, stalling learning,” he said. The Gujarat scheme aimed to stem this, but delays frustrated applicants. By November, 1,500 artisans filed RTIs demanding rejection reasons, as 47,599 claims covering 50,241 children gained approval yet disbursals lagged.
Broader data from the state assembly shows 2.4 lakh dropouts statewide in 2025-26, a 341 percent surge from prior year, despite 2,000 crore rupees in education spending. Diamond-linked cases dominate Surat, where 200 pupils quit Punagam schools post-Diwali 2024.
Gujarat Diamond Layoffs Education: A Generational Setback
Gujarat diamond layoffs education chains compound the crisis, as families prioritise survival over studies. Divyaben Makwana, 40, lost son Kewalbhai to suicide in June after his job vanished. Her younger boy, Karmdeep, 18, abandoned grade 11 for faceting coaching while job-hunting. “Debts swallowed us,” she shared.
The sector, with 1.2 million workers statewide, saw sales crash from 13.58 billion rupees in 2022-23 to 4.9 billion in 2024-25, per Surat Diamond Association. US tariffs, layered on Ukraine war disruptions, froze 4.8 billion dollars in exports. VHP leader Purvesh Togadia observed, “Dropouts overwhelm rural schools, eroding hope.”
Aid packages offer partial relief: interest subsidies up to 5 lakh rupees on loans at nine percent for three years, plus electricity duty waivers from July 2025. Yet unions decry exclusions for partial unemployed. Commerce ministry reports note overall trade deficit eased to 75.56 billion dollars in 2023-24, but gems suffered.
Background of Diamond Industry: From Boom to Bust in Surat’s Gems
Surat’s rise as diamond capital began decades ago, drawing migrants with promises of 100,000 rupees monthly wages. Factories hummed, polishing 80 percent of world gems. Russia’s 2022 invasion halted rough supplies, then US sanctions and tariffs sealed the downturn. Pre-2022, the industry exported 100 million dollars annually from 15 major units.
Global shifts, including lab-grown stones, eroded demand further. India retaliated minimally, per Research and Information System reports, focusing on diversification to UAE and China. Yet small exporters, 85 percent of volume, bore the brunt.
What’s Next: Hopes for Trade Talks
As Gujarat diamond layoffs education persists, stakeholders eye US-India dialogues. GJEPC pushes for tariff waivers, while unions demand wage hikes and welfare boards. Families like Bhai’s cling to promises of recovery, but experts warn prolonged US tariffs India diamond industry pain without policy shifts.
The path forward hinges on bilateral pacts, potentially restoring 50,000 workers who fled Surat in 12-14 months. Until then, the US tariffs India diamond industry casts long shadows over South Asian aspirations.
Published in SouthAsianDesk, December 9th, 2025
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