Ajay Lakum has spent most of his life working with diamonds. His income from sorting diamonds, while modest, was stable, allowing him to support his family of 10 and contribute to his mother's cancer treatment.

Two weeks ago, Lakum was among 20 workers laid off by his company. He called dozens of other companies looking for work, but no one was hiring.

"I am very stressed," the 35-year-old Lakum said, describing his despair at the thought of upcoming bills.

A diamond trader examines stones at a street market in Surat on 14/4. Photo: AP

A diamond trader examines stones at a street market in Surat on 14/4. Photo: AP

He is among many directly affected by the escalating trade war between the US and India. Four out of every 5 diamonds sold globally are first cut and polished in Surat, Gujarat, in western India, according to the Associated Press (AP).

Only a small fraction of the diamonds processed in Surat are consumed by Indian customers. The rest are exported to the US, the United Arab Emirates, Hong Kong, Belgium, and other markets. The US is the largest buyer, purchasing approximately USD 5 billion worth of diamonds in the last fiscal year, according to the Gem & Jewellery Export Promotion Council.

However, the 25% tariff imposed by US President Donald Trump on 7/8, expected to rise to 50% on 27/8, has brought this diamond hub to a near standstill. Export orders have been suspended. Union leaders estimate 50,000 workers have lost their jobs since April, when Trump announced a base 10% tariff on most US trading partners and first threatened higher tariffs on India.

The industry was already struggling due to Western sanctions against Russia, the primary supplier of rough diamonds to Surat's workshops before they reach US stores. There are fears the new tariffs will make Indian diamonds too expensive for major US jewelry companies, significantly reducing demand.

Hopes for a diplomatic breakthrough between Washington and New Delhi are fading. The Trump administration accuses India of benefiting from Russia's war in Ukraine and harming American workers. Trade talks scheduled for this week have been canceled, according to an anonymous source.

"The US tariffs will completely destroy our industry," said Ramesh Zilriya, president of the Gujarat Diamond Workers’ Union. He urged the US government not to impose tariffs that could lead to the "ruin of many lives."

Diamond cutters and polishers work in a Surat workshop on 14/4. Photo: AP

Diamond cutters and polishers work in a Surat workshop on 14/4. Photo: AP

On Kohinoor Road in north Surat, the heart of the diamond industry, an unusual quiet has descended. This road would normally be bustling with vehicles transporting thousands of diamond polishers, sorters, and cutters to work.

According to the Gujarat Diamond Workers’ Union, the city employed between 800,000 and one million diamond workers last year, most of whom are informal laborers not counted in national surveys. The union estimates up to 100,000 could lose their jobs if the US imposes the 50% tariff.

Vallabh Rathod, 45, co-owner of a diamond polishing company on Kohinoor Road, said orders from the US stopped on 1/8, before Trump announced the 25% tariff. With the tariff set to double this week, he believes business revival is a long way off.

In his workshop, only 25 diamond workers remain, half the usual number. "There is no work," said Vipul Patel, a diamond polisher with 25 years of experience.

To save money for payroll, Rathod asked many employees to take an extra 6 days off for a recent Hindu holiday. The office air conditioning is off despite the summer heat. His personal income also dropped from USD 690 per month to USD 285 in August.

"If this continues, we won't be able to survive," he said.

Amit Korat, president of the Surat Jewellery Manufacturers’ Association, said businesses will have to diversify to survive. One option is to focus on polishing and cutting cheaper lab-grown diamonds, which importers may still be able to afford with the current tariffs.

However, Avi Krawitz, a global diamond trade analyst, said profit margins, already thin partly due to increased prices for Russian diamonds because of sanctions, mean the new tariffs could force Surat to downsize its processing industry.

Most US retailers and wholesalers have stockpiled a three-month supply of gemstones, according to Paul Zimnisky, a diamond industry consultant. But if the US government proceeds with the 50% tariff, the entire supply chain will be severely impacted.

Everyone is in "wait-and-see mode," Zimnisky added. "It’s very difficult to do business in this current environment of uncertainty.”

A salesperson shows a diamond ring to a customer in a shop in Ahmedabad on 14/4. Photo: AP

A salesperson shows a diamond ring to a customer in a shop in Ahmedabad on 14/4. Photo: AP

Many businesses serving Surat's diamond workers are also severely affected. Munna Parmar, a street vendor selling tobacco on Kohinoor Road, said his daily earnings have fallen from USD 17 to USD 8. "I can't survive," he said.

Just behind him is Jay Patel, owner of a small shop selling the vegetarian dish dhokla. Lunchtime customers have drastically decreased since the end of July, halving his income.

"If the diamond industry suffers, we all suffer," he said.

Bhavesh Bhakhar, 49, has been a diamond sorter since he was 13. His keen eye assesses the quality of gemstones from around the world. He lost his job on 7/8 and doesn't know how he will support his family and pay his debts.

"The moment I wake up in the morning, I think about finding a job," he said. "I have gone everywhere, begging people to give me work.”

Hong Hanh (AP/Washington Post)