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 U.S. and China dropped, and competition from lab-grown diamonds rose, it said. The 50% tariffs, effective this week, makes exports to the U.S. 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, it said.
Trump raises U.S. tariffs on Indian imports to 50% The consequent reduced operating leverage could erode the operating margin of diamond polishers by 50-100 basis points and pressurise their credit profiles, it added. “this fiscal to 24%, CRISIL said. 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,” the rating agency saiOur analysis of 43 diamond polishers, accounting for nearly a fourth of the industry’s revenues, indicates as much,” the rating agency said. The Indian polished diamond industry derives 80% of its revenues from exports while the U.S. is a key market for India and accounted for as much as 35% of its exports. Secondary, tertiary effects of U.S. tariffs on economy pose challenges: Finance Ministry report 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
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