India Must Follow Antwerp’s Diamond Playbook

The recent trade deal between the EU and India laid bare the differing approaches to the diamond trade taken by two of the industry’s largest centers. Once again, Antwerp leveraged its position to secure favorable terms in the negotiations.

Under the agreement, India reduced its tariff on imports of natural polished diamonds from the European Union to 2.5%, down from 5.5%.

“This tariff reduction is the result of intensive lobbying efforts by the Antwerp World Diamond Centre, in close cooperation with the European Commission,” the AWDC said in a statement. “The measure represents a new boost for the Antwerp diamond industry and strengthens Antwerp’s attractiveness as a polishing center.”

It is not the first time Antwerp has ensured diamonds feature prominently in a trade agreement. Under the US-EU deal signed in September, natural polished diamonds from Europe were exempted from US import tariffs. So far, Antwerp remains the only diamond center to enjoy such a waiver.

That diamonds are included in these agreements is not happenstance. It requires deliberate lobbying by trade bodies acting on the industry’s behalf.

That reality was not always fully appreciated. In the depths of last year’s US tariff turmoil, there was a sense that the diamond industry could secure a blanket waiver across all source locations. It soon became clear, however, that US negotiations would be conducted at a state level, with individual governments, rather than by industry segment.

Responsibility therefore fell to local trade bodies to lobby their respective governments to ensure diamonds were included on the agenda.

The Antwerp World Diamond Centre (AWDC) has been the most effective in doing so. It now enjoys more favorable terms than any other center when trading with the world’s two most important diamond markets, the US and India. That represents a significant boost for Antwerp, which has faced some headwinds in the past decade.

Antwerp’s polished trade now enjoys a clear competitive edge over other centers, and it is reasonable to expect a return of some business to the city as a direct result of these two agreements.

India, meanwhile, continues to impose a 5.5% duty on polished diamond imports from non-EU countries, even after Sunday’s state budget speech by finance minister Nirmala Sitharaman.

The domestic industry was relieved that the budget at least preserved the status quo. All India Gem and Jewellery Domestic Council chairman Rajesh Rokde said the Union Budget 2026–27 reflected a stable and sensitive approach toward the gems and jewelry industry, according to the Economic Times.

That stability matters. As AWDC CEO Karen Rentmeesters noted, “Since 2012, we have seen the tariff fluctuate from 2% to 2.5%, then to 5% and even 7.5% in 2018, before falling again to 5.5% in 2022. This lack of predictability created uncertainty within the sector.”

Still, the 5.5% rate is a draconian policy of the Indian government. While intended to protect the local trade, in practice it places clear limitations on it.

As by far the world’s largest diamond manufacturing center, the duty prevents India from fully developing as a trading hub as well. That constraint is becoming more pronounced as India’s retail jewelry sector has taken off, overtaking China as the world’s second-largest market for diamond jewelry. The opportunity for India to evolve into a meaningful polished trading center has never been greater.

And neither has there been a greater need to encourage activity to boost local diamond trading, as both Mumbai and Surat have been severely affected by the global decline in demand.

More activity in Mumbai and Surat would be a net positive for the global diamond trade. Regular polished auctions and a freer exchange of goods would deepen liquidity, improve price discovery, and anchor more value-added activity within India, while giving dealers in other centers access to the dynamic Indian market.

Now, as the United States and India have reportedly reached a trade deal to reduce tariffs on each other’s goods, the Indian diamond trade would do well to take a page out of the Belgian playbook. That means not only lobbying for diamonds to be exempt from US tariffs, but also pushing for a reduction in India’s own duty on polished imports.

Such a move would open India’s fast-growing jewelry market to global supply, stimulate the domestic diamond trade, and, in turn, support healthier global trading conditions. As Belgium has demonstrated, a government’s position on industry matters can be influenced through sustained and coordinated trade advocacy.

Image: India's main polished diamond center, Bharat Diamond Bourse in Mumbai. (Credit: www.bdbindia.org)