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India's diamond capital Surat faces devastating crisis as Iran war and sanctions decimate the global diamond trade
Surat, the diamond capital of the world where nearly every diamond sold globally is cut and polished, faces a devastating crisis driven by the Iran war, Western sanctions on Russian diamonds and Trump tariffs. Factories that once employed 200 workers have laid off over 50, salaries have been halved, and former diamond polishers are turning to taxi driving to survive.
Surat in western India, known as the diamond capital of the world where nearly every diamond sold globally is first cut and polished, is facing a devastating economic crisis. The confluence of the ongoing Iran war, Western sanctions cutting off Russian diamond supplies and additional tariffs imposed by the Trump administration on Indian goods has pushed the sector into what local traders describe as a complete collapse of their business.
Inside Surat's vast diamond markets, business has slowed dramatically. Trade routes through the Middle East have been disrupted since the outbreak of the Iran-US conflict, causing shipping and insurance costs to surge. Traders say that when the Iran war started they faced tremendous difficulty, noting that while business was already slow, at least there was some work, but now the war has completely devastated their industry. The disruption to supply chains has made it increasingly difficult and expensive to import rough stones and export finished diamonds.
The human cost is starkly visible in the stories of workers like Pare Gediya, who spent eight years cutting and polishing natural diamonds in Surat's factories, earning around 350 euros per month, a decent income by local standards. Three months ago, the factory that employed him laid him off along with more than 50 other workers from a facility that once employed 200 people. Those still employed report their salaries have been cut nearly in half. Pare tried finding work at other diamond factories but was turned away everywhere.
India's gems and jewelry industry employs approximately 5 million people and represents a major component of the national economy. The sector depends on rough stones imported from Russia, the UAE, Belgium and parts of Africa, which are then cut and polished in Surat before being exported to the United States, Switzerland and the UAE. However, despite the scale of the crisis, the Gem and Jewelry Export Promotion Council, the government body representing the industry, denied there was any crisis when contacted by reporters.
Unable to find work in the diamond industry that defined his career, Pare Gediya has been forced to become a taxi driver, earning a fraction of what he once made polishing diamonds. His story is being replicated across Surat, where thousands of skilled artisans are being pushed out of an industry their families have worked in for generations. The crisis underscores how the geopolitical upheaval in the Middle East is sending shockwaves through unexpected corners of the global economy, devastating communities far removed from the conflict itself.