The imposition of import tariffs by the United States in early April has shattered any hopes that the diamond market would stabilize in March, and it has once again found itself in turmoil. While the overall impact on the global economy and stock markets is well known, the impact on the diamond industry has been severe.
Despite signs of a slight improvement in the first quarter of this year, Indian polished diamond exports fell to a 20-year low of 16.8% year-on-year in the 2024/25 financial year, reflecting weak demand from the United States and China. Rough diamond imports into India also fell by about 24%.
In anticipation of the new tariffs, Indian manufacturers exported about $2.5 billion worth of polished diamonds and also moved some of their inventory to their US offices. In fact, there is now enough inventory in the US to meet the upcoming demand at pre-tariff prices. Overall, however, many experts agree that Indian gem and jewellery exports are unlikely to recover this year.
US jewellery revenues grew 4.6% in the first quarter of 2025, with consumer demand for higher-end jewellery trending upward. Despite the revenue growth, volume fell nearly 7%, with average retail prices up 11% year-on-year. The drop in demand for lower-priced jewellery could well be a sign of a slowdown in the US economy, experts say. Lab-grown jewellery continues to fill the gap as a more affordable alternative.
In April, Dubai-based auction house Trans Atlantic Gem Sales (TAGS) held two tenders. The first featured a wider range of origins, sizes and quality of stones. The second tender, which closed on May 1, was dedicated to South African production, which is more focused on high-quality stones +10.8 carats and goods weighing more than 2 carats. The total value of diamonds put up for sale was about $30 million. Tenders attracted more than 100 companies from leading production centers.
The first tender ended with sales close to 50%, with larger stones selling with greater success. The second event, with an emphasis on higher-quality larger sizes, achieved a sales level of just over 75%. Together, the two events presented rough diamonds worth about $30 million.
The next tender will be held in Dubai from May 19 to 23.
Hélène Tarin, Editor-in-Chief of the Asian Bureau, Rough&Polished
