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India's natural diamond polishing industry faces 28-30% fall in revenues in FY26: Crisil
Aug-29-2025

Crisil Ratings in its latest report has said that India's natural diamond polishing industry faces a 28-30 per cent fall in revenues to $12.50 billion in this financial year (FY26) as the steep 50 per cent tariff imposed on Indian exports by the US kicks in. It said an additional 25 per cent tariffs on Indian products entering the American market came to effect on August 27, 2025 after the US administration's move to penalise India for purchasing Russian oil. This is on top of the 25 per cent the reciprocal tariff imposed by US President Donald Trump in April. 

The report said during 2024-25, the revenue of the natural diamond polishing industry in India stood at around $16 billion. The blow will follow a 40 per cent 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. It said 50 per cent 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. The Indian polished diamond industry derives 80 per cent of its revenues from exports while the US is a key market for India and accounted for as much as 35 per cent of its exports.  

Crisil Ratings said sales had begun getting impacted after a 10 per cent 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 per cent. But in a proactive move, diamond polishers had cranked up production in July and August to meet the anticipated festival demand in the US, which resulted in an 18 per cent growth in exports in July year-on-year. However, it said competition from lab-grown diamonds in markets such as the US, which has already captured 60 per cent of the market share by volume, and the subdued Chinese demand will continue to dent revenues. 


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