Surat Diamond Bourse was regarded as the industry's future. The $350 million complex in Gujarat, which has more floor space than the Pentagon, has nine sleek towers with sloping facades and ample space to accommodate thousands of dealers.
It was designed to highlight Surat's supremacy in the worldwide commerce, where nine out of ten diamonds are cut and polished before being sent to markets ranging from Dubai to Manhattan.
The thing is, it's empty.A spokeswoman stated that just roughly 250 of the bourse's 4,700 offices had been functioning since its inception in 2023. The enormous center corridor, designated as a meeting place for dealers to make deals, remains silent. Door after door is locked, and on-site cafes are incomplete concrete shells.Some retailers who purchased offices are already looking to sell.
The $80 billion diamond business is facing a growing crisis. For over a century, trade flowed in a single direction: from volcanic resources in Russia and Botswana to Antwerp's trading rooms, Surat's polishing floors, and jewelry stores around the globe. That supply chain created fortunes at every rung of the ladder, supporting entire economies along the way.
At its center was De Beers, the world's largest diamond miner, which basically established the modern industry and has long maintained tight control over supply and prices.

But those days are over, as a series of market shocks lowers the going pricing for practically every type of stone. Chinese luxury shoppers, previously the industry's primary growth engine, are no longer purchasing gems. Sanctions on Russian supply, which account for approximately one-quarter of world output, have necessitated expensive workarounds.
Record-high gold prices are inhibiting jewelry sales in the world's biggest consumer markets, with purchasers preferring bars and coins instead.
Mounting geopolitical tensions exacerbate the burden. The latest flashpoint, US-Israeli assaults on Iran that have resonated across sections of the Middle East, is disrupting trade flows and escalating inflation concerns, perhaps reducing discretionary spending on luxury items.De Beers lost over $1.5 million per day last year, hampered by trade delays and the rapid development of lab-grown diamonds. Chemically comparable to mined stones but considerably cheaper, synthetics are consuming a huge portion of the market, including the United States, where they were used in nearly half of engagement rings sold between January and August 2025, according to BriteCo data.
Anglo American Plc, De Beers' parent company, is scrambling to sell the business. The corporation has written down the unit three times in as many years, reducing its book value to $2.3 billion from $9.1 billion.In January, De Beers reduced pricing for stones larger than three-quarters of a carat and discontinued sales of smaller stones. However, industry insiders have seen early signs of recovery as supplies tighten.Natural diamonds cannot prevail in a market where the cheapest price is all that matters," said Paul Zimnisky, an independent market analyst based in New York.
In India, a series of tariffs imposed by US President Donald Trump last year, which reached as high as 50% on exports, proved to be the final blow. Traders still congregate in the tiny lanes of Mahidharpura, a busy market roughly 20 kilometers from the Surat Diamond Bourse, but business has slowed significantly.

Export demand has reached a two-decade low, and the Hindi word for recession is in everyone's vocabulary.
The shockwaves are global. Botswana, one of Africa's wealthiest countries because to diamonds, is looking to diversify following two years of economic downturn. Mineral revenue is expected to drop to 10.3 billion pula ($733 million) this fiscal year, less than half of the historical norm. Trade in Antwerp, another industry capital, has fallen to approximately $19 billion from a record of $41 billion in 2022.
Dinesh Bhai D Patel, a Surat diamond broker for over five decades, has seen wars, economic downturns, and the 2008 global financial crisis. He said that following each dip, the market will recover in a few months.

Dinesh Bhai D Patel, a Surat diamond broker for over five decades, has seen wars, economic downturns, and the 2008 global financial crisis. According to him, the market typically recovers within a few months following a slump."This time is different," he explained. "I've never seen anything like this."
Taken together, the industry's problems are so intractable that many consider it the deepest crisis in its contemporary history. In China, the drop in luxury demand has been so severe that hundreds of millions of dollars in unsold diamonds have returned to India's trading hub.

De Beers has struggled to retain control. Cecil Rhodes founded the erstwhile monopoly in 1888, and its control was based on a carefully managed sales approach. At the start of each year, the company and customers agree on the types and quantities of diamonds they will purchase. It organizes carefully choreographed transactions known as "Sights" ten times a year, in which selected purchasers - Sightholders - pay pre-set prices with no room for bargaining. They can refuse but risk losing future allocations.
By early 2025, the system was under stress. De Beers' official prices were significantly higher than those in the secondary market, where cutters and polishers traded among themselves.

De Beers' strategy was contentious. People connected to the company claimed it offered stability and directed more goods to the strongest customers, but its opaque approach irritated clients, with no transparency about who received discounts and who was required to pay full price. Rough diamond prices have dropped by more than 40% from the pandemic's peak, with polished stones also falling. As 2025 progressed, side deals accounted for up to half of sales.
Meanwhile, efforts by De Beers and its Russian rival Alrosa to limit supply were thwarted by Angola, where output increased. The country's diamond sales increased by nearly 70% last year, surpassing Botswana as Africa's largest producer. Angola hampered efforts to restore business by selling at current market prices, which were far lower than De Beers' stated rates.Still, there are hints that prices have stabilized and a partial rebound is taking form, particularly when supplies begin to run low in certain parts of the market. At its February sale, De Beers hiked prices for its largest stones by more than 5% for diamonds weighing more than five carats. While minor in comparison to previous reductions, some in the trade have interpreted the shift as increased confidence that the long-standing stone oversupply is now reducing.
De Beers has declined to respond.
Despite signs of improvement, the suffering in Surat and the adjacent villages is almost universal. Authorities at the diamond exchange have even invited a priest to bless the massive facility in the hopes of boosting momentum.Thakarshi Bhai Lodaliya invested 25 years in his diamond business, which previously employed 35 people. However, after Russia's invasion of Ukraine shook the market in 2022, orders began to decrease. Eventually, they stopped completely, forcing him to close the factory last year.""I spent my life's savings, and one day there was simply no money left to keep going," he explained.
Jewelry makers who used to buy in bulk now order only what they need, when they need it, refusing to store inventory as prices fall. No one knows where the floor is.""They don't want to keep stock," explained Manoj Borda, a second-generation diamond industry owner. "If they do, they will incur a loss."

Today, several industries in Surat are introducing lab-grown production lines. For the most of the industry's history, the worth of diamonds was based on the belief that gems are rare and that no technology could recreate what the Earth had spent billions of years making. However, laboratories from Surat to Shenzhen can now make the identical stone in around six weeks, upending a supply chain that employs almost a million people in India.
Borda runs two natural diamond manufacturing plants and a three-year-old lab-grown unit from an office surrounded by CCTV screens. The screech of polishing machines reverberates along almost every street.

"If you were here two years ago, this entire room was packed," he remarked, pointing to unoccupied desks in a tightly organized workspace for polishers. Around 800 workers have departed the floor, leaving approximately 5,000 staff."I'd be surprised if things recovered," Borda stated.