The global diamond industry continues to navigate turbulent times into the second half of 2025. Following the announcement of United States (US) tariffs on diamond imports in April, there was a surge in exports from several producing countries ahead of the tariffs’ implementation in August.
This trend was evident in Botswana, where diamond exports in the second quarter rose by an impressive 92% compared to the first quarter, according to the latest Econsult third-quarter economic review compiled by economist Dr. Keith Jefferis.
However, Dr. Jefferis noted that the spike in exports may have been temporary.
“Now that there are large stocks of diamonds in the US, demand for diamond imports may fall away in the third quarter,” he explained, adding that official data will only be available in late November.
He further highlighted that the tariff regime remains unsettled. As of October 2025, Botswana’s diamond exports to the US are subject to a 15% tariff. Most of Botswana’s diamonds, however, are first exported to India for cutting and polishing and India now faces a 50% tariff on its diamond exports to the US.
The US government has announced that diamond exports from “aligned” countries those with formal trade agreements with the US will face zero tariffs. So far, Belgium is the only major diamond exporter benefiting from this concession.
Discussions are reportedly ongoing between the Government of Botswana and the US authorities to extend this zero-tariff concession to Botswana. According to Dr. Jefferis,
“If achieved, this would provide a significant uplift to Botswana’s diamond industry from mining and sales to cutting and polishing. The latter may even see some relocation from India to Botswana.”
However, if Botswana is not granted this concession, and high US tariffs on Indian exports persist, it is more likely that parts of India’s cutting and polishing sector will relocate to the Gulf States, which enjoy lower US tariffs and a more investor-friendly environment.
Mixed Market Signals
Despite the price uptick brought on by tariffs, the diamond market particularly in the US continues to show mixed signals. Diamond prices and the overall value of jewellery sales have risen, but sales volumes of natural diamonds have declined.
As noted by market analyst platform Tenoris.bi, “the disparity between the increased demand for finished diamond jewellery and the decrease in loose diamond sales is worrying.”
Dr. Jefferis echoed this concern, explaining that it underscores a deeper challenge for the industry:
“The diamond industry is facing decreased demand for diamond engagement rings set with natural diamonds, a reflection of shifting generational preferences.”
This soft demand has had direct repercussions for Botswana. A special off-schedule diamond auction held by the Okavango Diamond Company (ODC) in late September ended with no sales, as bids fell below reserve prices.
“ODC achieved exactly the same market result as De Beers earlier,” Dr. Jefferis observed. “Many categories of diamonds apart from larger, high-value stones , could only be sold at ‘fire-sale’ prices that would undermine the long-term value of natural diamonds.”
This outcome came despite earlier government criticism of De Beers for its own unsold stockpiles and despite ODC being a government-controlled entity.
Marketing Push Needed
Amid these challenges, the Luanda Accord signed in June 2025, a collective agreement by major natural diamond producers to contribute to a marketing fund under the Natural Diamond Council offered a glimmer of hope.
However, Dr. Jefferis cautioned that delays in contributions from producing countries risk weakening the initiative’s impact.
“The delays in funding may cause the industry to miss a critical opportunity to actively market natural diamonds ahead of the crucial 2025 peak demand season,” he warned.
Outlook
While Botswana’s diamond sector saw strong export figures earlier in the year, the overall market outlook remains uncertain. The interplay between US tariffs, global demand shifts, and evolving consumer preferences will continue to shape the industry’s fortunes heading into 2026.
