Will Trump’s India tariffs shut down world’s biggest cut diamond supplier?
Summary
The diamond industry in India, especially small businesses in Surat, faces challenges due to a 50% tariff imposed by the U.S. on Indian goods. The tariffs might lead to business closures, as many U.S. buyers are canceling orders of cut and polished diamonds, heavily impacting Indian exporters.Key Facts
- Kalpesh Patel, who runs a diamond polishing business in Surat, worries he might have to shut down due to high U.S. tariffs.
- The U.S. is a major market for Indian cut and polished diamonds, with $4.8 billion exported there in the 2024-25 financial year.
- The U.S. implemented a 50% tariff on Indian imports following failed trade negotiations.
- This increase is partly a penalty for India buying Russian oil, amid U.S. pressure related to the Ukraine conflict.
- Surat is a key city for diamond processing, home to many small businesses impacted by the tariffs.
- Over 2 million people work in the Indian diamond industry, with many already experiencing salary cuts.
- Previous tariffs were 2.1%, but with the new increase, the total effective tariff on the gems industry is now 52.1%.
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