The gleaming halls of Gujarat's state-of-the-art diamond trading hub stand nearly deserted, a haunting sign of deep troubles plaguing India's powerhouse diamond industry, valued at around $80 billion worldwide. Launched with great fanfare in 2023, the massive Surat Diamond Bourse – larger than the Pentagon – was poised to rival global giants like Antwerp and Tel Aviv. But just two years on, its vast trading floors echo with silence as brokers and polishers stay away.

Industry veterans describe this as the worst downturn in five decades, surpassing even the 2008 financial crisis. Dinesh Bhai D Patel, a broker with over 50 years of experience, told reporters the bourse's emptiness mirrors a sector in freefall. Surat polishes 90% of the world's diamonds, but factories now operate at half capacity. Exports have nosedived nearly 28% from $25.48 billion in 2021-22 to $18.37 billion in 2023-24, hammered by slumping demand in key markets like the US, China, and the Gulf – down 15-20% in places.

G7 sanctions on Russian rough diamonds, which make up 29% of global supply, have snarled supply chains. US tariffs soaring to 50% have dried up orders, triggering over 100,000 job losses in regions like Saurashtra. Rising gold prices, inflation-curbing consumer caution, and a flood of affordable lab-grown diamonds are squeezing natural stone sales further. Post-Diwali, more than 2,000 factories shuttered, with 50-60% closures across Surat, Ahmedabad, Rajkot, and Bhavnagar – leaving only half the workforce returning where doors reopened.

The human cost is devastating. Dozens of polishers – estimates range from 45 to 100 – have taken their lives in recent years, overwhelmed by debts and unemployment. Many survivors have pivoted to farming or daily labor, abandoning the trade that once defined their lives. One factory owner persists despite mounting losses, driven by a commitment to keep his employees fed. "It's not about business anymore; it's about survival," he shared.

Optimists point to potential lifelines: ramping up lab-grown diamond output and eyeing growth in Southeast Asia. Experts like Dinesh Navadiya from the Indian Diamond Institute urge adaptation to sanctions and tech innovations to reclaim Surat's dominance. Gujarat's diamond clans, long prized as ideal marriage matches, now face "no diamond traders" warnings in matrimonial ads. Yet the industry's history of rebounds offers cautious hope for a turnaround.