National News
Tariff hike to cut revenues of diamond polishers 28-30% this fiscal: CRISIL RATINGS
Reduction in debt to cushion profitability impact; credit profiles face challenges
India’s natural diamond polishing industry faces a steep 28-30% fall in revenues to ~$12.50 billion this fiscal, compared with $16 billion last fiscal, after the imposition of 50% tariffs (25% reciprocal plus 25% penalty) by the US. The blow will follow a ~40% degrowth over the past three fiscals because of a fall in both prices and sales volume of natural diamonds as demand in the US and China dropped, and competition from lab-grown diamonds rose.
The 50% tariffs, effective this week, makes exports to the US tough for two reasons: one, the industry’s low margins make absorption of the incremental levy very difficult and two, declining demand means passing on the incremental burden to consumers will not be easy. The consequent reduced operating leverage could erode the operating margin of diamond polishers by 50-100 basis points and pressurise their credit profiles.
Our analysis of 43 diamond polishers, accounting for nearly a fourth of the industry’s revenues, indicates as much.
The Indian polished diamond industry derives 80% of its revenues from exports while the US is a key market for India and accounted for as much as 35% of its exports. Sales had begun getting impacted after a 10% tariff was imposed in April 2025. Hence, the share of the US in India’s polished natural diamonds slid 1100 basis points in the first four months of this fiscal to 24%.
But in a proactive move, diamond polishers had cranked up production in July and August to meet the anticipated festival demand in the US. Not surprisingly, exports surged 18% in July on-year And competition from lab-grown diamonds in markets such as the US will continue to dent revenues, with the variety having already captured ~60% of the market share by volume. Subdued Chinese demand adds to these woes.
Says Rahul Guha, Senior Director, Crisil Ratings, “The upshot is that revenues for the domestic industry, which polishes ~95% of all diamonds produced in the world, is set to drop to its lowest since 2007. To be sure, consumption in India has been increasing sequentially over the years, but the incremental demand doesn’t have the heft to fully offset the losses in the US and China. Additionally, while the UAE has emerged as a dominant hub for India’s exports with its share doubling to ~20%, on year, the risks of a substantial downturn in revenues are high.”
The industry’s ability to navigate the market dynamics, including tariffs, is crucial to its future. Diamond polishers can take three steps: increase domestic sales; push sales in alternative geographies; and set up polishing facilities in trading hubs as rerouting via low-tariff nations is not an option. Even if retailers explore alternative sourcing options in lower-tariff countries such as the UAE or Belgium, a significant portion of the diamonds would still be polished in India and thus subject to higher tariff.
And given the falling demand, US retailers are unlikely to absorb the tariff cost. Hence, operating margins of diamond polishers would decline to 3.5-4.0% after dropping 100 bps in the past three fiscals from a peak of 5.5% in fiscal 2023.
Diamond polishers are expected to keep a lean inventory to control debt. Miners have cut production to limit the fall in prices, in line with subdued demand. Timely collection from customers abroad will be monitorable amid slowing demand. Debt levels of diamond polishers should reduce over the medium term. In the road ahead, demand for natural diamonds in key markets will need close monitoring, given the tariff landscape and geopolitical uncertainties.
The All India Gem & Jewellery Domestic Council (GJC) successfully concluded the landmark 10th edition of the India Gem & Jewellery Show (GJS 2026 Diwali Edition), celebrated as #HumaraApnaShow, at the Jio World Convention Centre, Mumbai. From October 2–4, 2026, the exhibition reaffirmed its position as India’s most premium B2B jewellery platform, bringing together over 400 exhibitors, 700+ booths, and thousands of buyers and industry leaders from across India and abroad.
The show began on October 1, 2026, with the Elite Family Jewellers Meet & Business Workshop, led by India’s leading business coach Rahul Jain, designed exclusively for jewellery business owners and their families. The workshop provided participants with strategies on growth, profitability, leadership, and customer acquisition, setting the stage for an enriching exhibition.
The show was inaugurated on October 2, 2026, by Chief Guest Shri Uday Samant Ji, Cabinet Minister for Industries and Marathi Language, Government of Maharashtra, who lauded GJS as a platform that reflects the strength, creativity, and resilience of India’s jewellery industry. He emphasized Maharashtra’s role as a hub for trade and craftsmanship, noting that GJS showcases how tradition and innovation can come together to drive growth. His words set the tone for an inspiring edition that celebrated both heritage and modernity.
Guest of Honour Srinivas Injeti, Chairman NSE and Chairman of the board IAGES, Mahesh Jain, President, UP Sarafa Association, and Special Guest Rajiv Jain, Chairman, Jaipur Jewelley Show along with members of the GJC Committee of Administration and other senior industry leaders, underscoring the collective strength and unity of India’s jewellery fraternity.
On October 3, the prestigious National Jewellery Awards (NJA) 2026, presented by the World Gold Council and powered by India Gold Metaverse, honoured excellence across categories. The evening was graced by Bollywood star Sonakshi Sinha, who presented awards to the winners, adding glamour and recognition to the industry’s most coveted celebration.
Throughout the three days, GJS hosted MindSpeak Seminars, covering diverse topics across all aspects of the jewellery business — from sustainable practices and digital transformation to consumer trends, family business strategies, and the growing role of Artificial Intelligence (AI) in design, retail, and customer engagement. These sessions empowered jewellers with insights to adapt to evolving market dynamics and embrace technology-driven growth.
The exhibition also showcased exclusive collections ranging from lightweight contemporary designs to heritage-inspired masterpieces, lab-grown diamond innovations, and couture jewellery.
Rajesh Rokde, Chairman of GJC, said:
“The successful conclusion of the 10th edition of GJS is a proud moment for India’s jewellery industry. From the grand inauguration led by Shri Uday Samant Ji to the NJA awards presented by Sonakshi Sinha, this edition has set new benchmarks in innovation, networking, and business growth. The record sales figures highlight the resilience of our industry and the trust consumers place in Indian craftsmanship.”
Avinash Gupta, Vice Chairman of GJC, remarked:
“GJS2026 has proven to be the ultimate sourcing destination for jewellers nationwide. The strong participation, exclusive collections, and vibrant sales reflect the industry’s ability to balance heritage with modernity. The NJA awards further reinforced the industry’s credibility by honouring talent and innovation, making this edition truly memorable.”
Saiyam Mehra, Convenor of GJS and GJC NEXTGEN and Past Chairman of GJC, added:
“This edition of GJS was more than an exhibition—it was a celebration of resilience, creativity, and opportunity. As Convenor of GJS, I am proud to see how these platforms together showcased innovation, honoured excellence, and inspired the industry to embrace the future with confidence. The seminars, awards, and unique showcases have strengthened our collective vision for India’s jewellery sector as a global hub of excellence.”
The 10th edition of GJS concluded with resounding success, leaving behind a legacy of innovation, collaboration, and celebration that will continue to inspire the jewellery industry in the years to come.
Uday Samant, Cabinet Minister for Industries and Marathi Language, Government of Maharashtra, unveiled the JewelBuzz GJS Diwali Edition Special Issue, featuring Rajesh Rokde, Chairman, GJC, on the cover.
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