Overview

• The U.S. has imposed a combined 50% tariff on polished diamond imports from India, with an additional 25% penalty tied to India’s Russian oil purchases taking effect this week on top of an earlier 25% levy.
• Crisil projects FY26 revenues for India’s natural diamond polishing industry at about $12.5 billion, down from $16 billion last year and the lowest since 2007.
• Operating margins are forecast to decline to roughly 3.5–4% with a 50–100 bps erosion, and interest coverage is seen slipping to around 2x even as leverage stays near 0.7–0.8x.
• Access to the key U.S. market has deteriorated, with its share of India’s polished diamond exports falling to about 24% in the first four months of the fiscal after earlier tariff hikes, despite a July export rush to beat the deadline.
• Structural pressures persist after a three‑year, roughly 40% revenue slide driven by weak U.S. and China demand and the rise of lab‑grown diamonds near 60% of U.S. volume, while duty‑drawback hikes on Aug 25 offer limited relief and rerouting via the UAE or Belgium is unlikely to bypass U.S. tariffs.