India’s diamond and stone trade surges ahead of US tariff hikes

Published 13/08/2025, 19:38

Investing.com -- India’s exports of polished diamonds and natural stones jumped in July as US buyers stocked up ahead of tariff increases, trade data show, in a move analysts say may mask underlying market weakness.

The United States imposed a 25% tariff on Indian goods from Aug. 7, with another 25% set for Aug. 27.

The hikes have sent the diamond sector into “turmoil,” says Morgan Stanley, as American retailers moved quickly to secure inventory, while trading outside the US slowed.

Data show India’s rough diamond imports rose 20% by value and 32% by volume from June, recovering to their five-year range after a sluggish first quarter.

Polished stone exports climbed 38% by value and 22% by volume month-on-month, also beating seasonal patterns, though still below their five-year average.

Lab-grown diamond exports saw the steepest rise, up 83% in value from June, outpacing natural stones and suggesting further market share gains for the synthetic segment. The surge likely reflected inventory clear-outs ahead of the tariff deadlines.

The spike in shipments comes amid production cuts from major miners. De Beers’ Debswana and Russia’s Alrosa have already trimmed supply, while Canada’s Burgundy Diamond Mines halted operations at its Point Lake mine, calling it uneconomic. UK-listed Gem Diamonds also cut its 2025 output forecast and reduced staff.

India is a pivotal player in the diamond value chain, cutting and polishing about 90% of the world’s stones. Whether the pre-tariff rush signals a lasting recovery or simply a temporary distortion will hinge on demand trends in the US, China and other major markets in the coming months.

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