CRISIL Report: India’s  Natural Polished Diamond exports up 18 pc YoY in July 2025

India’s natural polished diamond exports recorded an 18 per cent surge in July on a year-on-year basis, as it had cranked up production to meet the anticipated festival demand in the US. The industry is projected to see a 28-30 per cent decline in revenues, dropping to approximately $12.50 billion this fiscal year, down from $16 billion last fiscal year due to the impact of US tariffs.

A 40 per cent decrease in revenue was seen over the past three fiscal years due to falling prices and sales volume of natural diamonds, as demand in the US and China dropped amid rising competition from lab-grown diamonds.

Crisil Ratings called on domestic diamond polishers to boost domestic sales, push sales in alternative geographies and set up polishing facilities in trading hubs, as rerouting via low-tariff nations is not feasible.

The 50 per cent tariffs, effective this week, complicate exports to the US because of the industry’s low margins that make it hard to absorb the additional levy. Further, declining demand makes it difficult to pass the burden onto consumers,

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 generates 80 per cent of its revenue from exports, with the US accounting for 35 per cent of these exports. The lab-grown diamonds have already captured about 60 per cent of the market share by volume in the US.

“Consumption in India has been increasing sequentially over the years, but the incremental demand doesn’t have the heft to fully offset the losses in the US and China,” said Rahul Guha, Senior Director, Crisil Ratings.

Guha added that the UAE has emerged as a dominant hub for India’s exports, with its share doubling to 20 per cent YoY.