How Efforts to Control the Diamond Trade Are Hurting the Very Communities They Were Supposed to Protect

For more than two decades, global policies aimed at restricting the flow of diamonds from conflict zones most notably through the “blood diamond” narrative have reshaped the way diamonds are traded. These measures were intended to protect vulnerable communities in Africa from exploitation and violence. But today, the ripple effects of those same restrictions are being felt thousands of kilometres away, exposing the fragility of a supply chain that depends on the livelihoods of millions.

In India’s diamond capital of Surat, where an estimated 80% of the world’s diamonds are cut and polished, workers like Alpesh Bhai once saw diamonds as a pathway out of poverty. The industry offered stability, income, and, for the first time, the promise of private education for their children.

That progress has since been jeopardised.

A Perfect Storm of Restrictions and Sanctions

First, sanctions targeting Russian rough diamonds disrupted supply a supply which, for India, had been essential. Then came the imposition of 50% United States tariffs on polished diamonds, compounding the downturn.

The intention behind these measures from conflict-diamond controls in Africa to punitive trade tools against Russia has been to hold powerful actors accountable. Instead, the burden has fallen hardest on those with the least power in the chain: cutters, polishers, and their families.

Alpesh, once earning enough to support education for his two young daughters, saw his salary cut nearly in half before losing his job altogether. Private schooling quickly became unaffordable. He withdrew his children and moved them into a public school where learning opportunities are significantly limited.

“I’ve come back to where I started,” he said a sentiment now echoed across Surat.

The Human Cost Behind Supply Chain Pressure

Surat’s diamond sector employs over 600,000 people, many migrants from rural Gujarat who rely entirely on this trade. Layoffs, pay cuts, and reduced working hours have affected close to 400,000 workers.

Families are leaving the city. Children are dropping out of school. In the most tragic cases, mounting financial pressure has led to a rise in worker suicides.

Community leaders describe the situation as unprecedented. “The industry was always a ladder out of poverty,” one union representative explained. “Now that ladder is shaking for many, it’s disappearing.”

A Stark Reminder for the Diamond World

Conversations about responsible sourcing must include responsibility to all those in the value chain including cutters and polishers who transform rough diamonds into the beautiful stones valued globally.

Policies crafted to protect African workers from exploitation have, ironically, become a new form of harm both in Africa, where mining communities still struggle, and now in India, where workers are paying the price for geopolitical decisions far beyond their control.

As the global diamond market continues to evolve, one thing is clear:

Ensuring the ethical integrity of diamonds must not stop at the mine.
It must extend to every skilled hand that shapes them and every child whose future depends on this industry.

DCLA Transparent Certification and Shared Responsibility

Lab Grown Workers Strike in “Misunderstanding” on Pay

Hundreds of polishers at Greenlab, recognized as India’s largest lab-grown diamond producer, walked out last Friday (28 November) in a row over wages.

They gathered at the gates of the factory in Surat following reports that their per-carat fee was to be reduced.

But they returned to work a few hours later after management sent out voice messages assuring them there would be no cut.

A Greenlab director described the incident as a “small misunderstanding,” triggered by misinformation during internal discussions on inventory and other business issues.

Bhavesh Tank, vice president of the Diamond Workers’ Union Gujarat, told the Indian Express: “After Diwali, a growth is seen in the demand of the lab grown diamond industry in the domestic and international market.

“The company’s owners should also ensure that the diamond workers, who have been facing financial problems over the last couple of years due to poor market demand, are paid sufficient salaries when the market is in good condition.”

Unions say many workers’ wages have not kept up with living costs, and that both natural and lab-grown units have seen friction over sudden changes in per-carat rates and job losses tied to swings in export demand.

Greenlab operates across the chain, growing rough lab growns, cutting and polishing them, and setting them in finished jewelry for both Indian and export markets.

It famously manufactured the 7.5-carat lab grown diamond that India’s prime minister Narendra Modi gifted to US First Lady Jill Biden in June 2023.

The company sells its polished diamonds through its US subsidiary, Labon, and has a distribution partnership with Florida-based Green Rocks.

Source: DCLA

Two Arrested over $540,000 Online Diamond Fraud

Two men have been arrested in India, accused of a sophisticated online fraud in which they obtained diamonds worth $542,000.

They and their accomplices allegedly posed as genuine US-based buyers on the RapNet trading platform.

They negotiated the purchase of diamonds from six traders in Surat, had the stones shipped, then disappeared without paying.

Police in Surat say they have arrested two men from the city – named as Nikunj Ambaliya and Mitul Goti – and are pursuing eight other suspects.

Officers were first alerted by trader Sanjay Goti, who sold a $90,000 diamond to man who identified himself as Arson Isaco.

Payment was due within seven days. But Goti became concerned when “Arson Isaco” made excuses, then switched off his phone and failed to pay.

Five other traders subsequently came forward with similar accounts, relating to six diamonds.

Goti said he’d contacted a number of diamond firms in Surat and had confirmed that a buyer of that name existed.

The accused men posed as employees of US diamond firms and took delivery of the diamonds in Dubai, Hong Kong, and Bangkok, said Karanraj Vaghela, of Surat police.

“After investigations, we arrested Nikunj Ambaliya and Mitul Goti, and identified Chetan Suthar and Anuj Shah as co-accused. These four, along with six others, conspired to cheat reputed diamond traders in an international diamond fraud.”

Source: DCLA

Will US Tariffs Threaten the World’s Largest Diamond Cutting Hub?

In Surat, India’s famed “Diamond City”, where 14 out of every 15 natural diamonds are cut and polished, a deepening crisis is unfolding.

For Kalpesh Patel, a 35-year-old owner of a small diamond cutting and polishing unit, this year’s Diwali could mark more than just a festival of lights — it may signal the lights going out on his eight-year-old business. Patel employs 40 workers transforming rough stones into polished gems destined primarily for the United States. But with the recent announcement by US President Donald Trump of a 50% tariff on imports from India — taking the total duty on cut and polished diamonds to 52.1% — the industry’s already fragile state may tip into collapse.

The US is India’s largest export market for diamonds, accounting for over one-third of total shipments. In the 2024–25 financial year, India exported $4.8 billion worth of cut and polished diamonds to the US, out of a total $13.2 billion worldwide. For many small and medium-sized manufacturers in Surat, Ahmedabad, and Rajkot — employing more than two million people — this trade lifeline is now under severe threat.

An Industry Already Under Pressure

The tariffs arrive on top of multiple recent challenges. The COVID-19 pandemic slowed global luxury demand, the Russia-Ukraine conflict restricted access to rough diamonds, and the G7 ban on Russian stones further strained supply chains. Salaries for many diamond workers in Gujarat have already been halved in recent years, with some forced into poverty-level incomes. Tragically, industry unions report dozens of suicides linked to the ongoing downturn.

Lab-grown diamonds have added to the pressure, offering consumers a lower-priced alternative — often just 10% of the cost of natural diamonds — and proving difficult to distinguish without professional laboratory testing, such as that provided by DCLA. This shift in consumer preference is eating into the market for natural stones, further squeezing margins for cutters and polishers.

Declining Trade Figures

According to the Gem and Jewellery Export Promotion Council (GJEPC), India imported $10.8 billion worth of rough diamonds in 2024–25, a 24% drop from the previous year. Exports of cut and polished natural diamonds fell nearly 17% year-on-year.

Industry leaders warn that if the new US tariffs remain in place, as many as 200,000 workers could lose their jobs in Gujarat alone.

Ripple Effects Beyond India

The impact will not be confined to India. US jewellers — around 70,000 businesses — will also feel the pressure as higher prices could dampen consumer demand. This could disrupt supply chains, delay deliveries, and push customers towards alternative products.

Finding a Way Forward

Some in the industry see an opportunity to strengthen domestic demand and diversify exports towards Latin America, the Middle East, and other emerging markets. India’s domestic gems and jewellery market is projected to grow from $85 billion to $130 billion within two years, offering a potential buffer.

For now, though, the threat is real and urgent. Without relief on tariffs, support for natural diamond certification, and a coordinated strategy to protect jobs, the world’s biggest cutting and polishing centre risks losing its global dominance — and with it, a key part of the natural diamond supply chain.

As Patel puts it, “Without help, the business will lose its shine forever.”

Source: DCLA

Surat Trade Show Moves to Smaller Venue

The Carats 2025 trade show is switching to a smaller venue amid the ongoing diamond industry downturn.

The three-day B2B event, organized by the Surat Diamond Association (SDA), will take place at Avadh Utopia lifestyle club and hotel, in Surat, rather than the 1.5m sq ft Surat International Exhibition and Convention Centre (SIECC) where it has been held previously.

Only 73 exhibitors have registered for the event, which opens on 11 July, according to Times of India, compared to 118 last year.

Organizers said the move was in response to participants’ preferences, rather than lower exhibitor numbers. Many diamond manufacturers expressed a preference for a venue with hotel facilities.

SDA says in an Instagram post that it’s expecting over 7,000 visitors and over 200 buyers. In 2024 it reported 10,000 visitors.

“This milestone attendance underscores the exhibition’s position as a leading platform for showcasing innovation and excellence in diamond industry,” said SDA Jagdishbhai Khunt at the time.

Source: DCLA

Relief Package for Surat’s Diamond Workers

A limited relief package has been announced for diamond workers and small manufacturing units in Surat.

The Gujarat state government is responding to widespread job losses and economic hardship among the estimated one million diamond workers in Surat as the global slowdown persists.

The relief package, as detailed by chief minister Bhupendra Patel, will cover school fees for children of jobless diamond artisans in full, subject to certain conditions.

Small diamond manufacturing businesses will be eligible for low-interest loans and a one-year year exemption from the duty charged on their electricity bills.

The move has been given a cautious welcome by the Diamond Worker Union Gujurat, but there are ongoing calls for more comprehensive support, particularly for unregistered workers and families affected by the crisis, as well as for families of diamond workers who have taken their own lives.

Source: DCLA

Surat Diamond Manufacturing Shuts Down

The entire polishing industry in Surat has shut until March 31 after Indian authorities introduced tight restrictions to slow the spread of the coronavirus.

Activities stopped on Tuesday in line with a lockdown enforced by the Gujarat state government. The Bharat Diamond Bourse in Mumbai also closed from Friday until the end of the month following similar measures in Maharashtra state.

“In this panic situation, all are requested to stay at home, [stay] healthy, and spend time with family,” the Surat Diamond Association and the Gem & Jewellery Export Promotion Council (GJEPC) said in a joint letter to the Surat trade on Saturday. The organizations urged companies to shut their offices and manufacturing units in the city, the world’s largest center for polishing. Safe-deposit vaults will remain open for two hours each day, they noted.

The GJEPC said it had closed its head office in Mumbai until March 31, with all employees working from home.

Source: DCLA

Surat Diamond Manufacturing Shuts Down

The entire polishing industry in Surat has shut until March 31 after Indian authorities introduced tight restrictions to slow the spread of the coronavirus.

Activities stopped on Tuesday in line with a lockdown enforced by the Gujarat state government. The Bharat Diamond Bourse in Mumbai also closed from Friday until the end of the month following similar measures in Maharashtra state.

“In this panic situation, all are requested to stay at home, [stay] healthy, and spend time with family,” the Surat Diamond Association and the Gem & Jewellery Export Promotion Council (GJEPC) said in a joint letter to the Surat trade on Saturday. The organizations urged companies to shut their offices and manufacturing units in the city, the world’s largest center for polishing. Safe-deposit vaults will remain open for two hours each day, they noted.

The GJEPC said it had closed its head office in Mumbai until March 31, with all employees working from home.

Source: DCLA