The layoffs, concentrated in Bhavnagar, Amreli and Junagadh, have hit small cutting and polishing units the hardest, with workers earning ₹15,000–₹20,000 a month now left without work. Industry sources say export orders from US buyers have been cancelled or delayed, leaving production lines idle.

India processes almost 90% of the world’s diamonds, with the US and China as top markets. In FY25, exports to the US stood at $10 billion, led by cut and polished stones. Now, industry leaders warn the lab-grown diamond sector—which also depends heavily on US demand—could be next in line for a hit.

The impact isn’t limited to Gujarat. Rajasthan’s jewellery trade, centred in Jaipur, is bracing for losses after exporting ₹3,154 crore worth of gems and jewellery to the US last year. Exporters are scouting new markets, but admit diversification will take time.

Surat, India’s largest diamond hub, employing 8 lakh workers, has so far been spared mass layoffs—but traders fear it could be next if US orders don’t recover.

Industry bodies are urging the government to fast-track trade talks with Washington and provide relief measures including higher export incentives, interest subsidies, and faster GST refunds.