Russia’s diamond mining giant ALROSA is adapting to the challenges brought about by the recent U.S. tariff hikes on polished diamond imports from India. CEO Pavel Maryinchev is confident that although the industry will require time to adjust, the lasting effects of these tariffs are expected to be manageable. He highlighted that India’s cutting and polishing sector is likely to adapt, thereby minimizing the impact on operations. As the holiday season draws near, there is optimism for a resurgence in demand, especially in the luxury jewelry market.
Impact of U.S. Tariffs on the Diamond Industry
The recent rise in U.S. tariffs on polished diamond imports has raised concerns among diamond companies, but ALROSA’s CEO believes the industry will find a way to adapt. Maryinchev noted that the Indian cutting and polishing sector experienced a surge in diamond purchases in August and September, followed by a decline in October. He does not foresee lasting consequences from the high tariffs, as businesses are likely to adapt. However, he acknowledged that some increased costs due to tariffs may eventually be passed on to consumers. Despite this, luxury jewelry buyers tend to be less sensitive to price changes, enabling retail brands to temporarily absorb some costs.
As Christmas approaches, Maryinchev anticipates a rebound in demand within India, particularly with encouraging sales data emerging. He stressed the need for diamond jewelry manufacturers to adapt their production processes to the new tariff structure. With ALROSA being the largest diamond miner globally, accounting for over 30% of the world’s output, the company is closely monitoring market conditions to maintain its leadership position.
Market Stability and Production Adjustments
ALROSA is implementing strategic adjustments to its operations in response to current market conditions. The company has suspended production at less profitable mines and expects a 10-15% decrease in output this year, following a production of 33 million carats in 2024. Maryinchev pointed out that while Indian cutting and polishing units have faced challenges over the past three years, demand remains robust in key markets, including the U.S., Europe, the Middle East, and India.
In the third quarter of 2025, major Indian retailers reported double-digit growth in sales, averaging a 29% year-on-year increase. Positive data from China further supports the notion of market recovery. Maryinchev cited two main factors contributing to this optimism: stable global demand for jewelry and a decline in diamond production. He noted that inventories throughout the diamond pipeline are gradually normalizing, setting up favorable conditions for price recovery.
Challenges from Synthetic Diamonds
Maryinchev addressed concerns regarding synthetic diamonds and their potential to replace natural stones. He observed a significant decline in wholesale prices for lab-grown diamonds, which dropped nearly 40% year-on-year in the third quarter of 2025. The price gap between synthetic and natural diamonds has widened, with natural diamonds now commanding a premium due to their unique qualities and historical significance.
He describes synthetic diamonds as “expensive costume jewelry,” similar to other lab-created stones like moissanite and cubic zirconia. This distinction is particularly important for luxury consumers, who are willing to pay more for the authenticity and heritage associated with natural diamonds. As the market evolves, Maryinchev believes that natural diamonds will continue to hold a unique position, despite the rise of synthetic alternatives.
Environmental Considerations in Diamond Mining
ALROSA’s competitive edge lies in its ability to guarantee the natural origin of its diamonds. Maryinchev countered claims that lab-grown diamonds are environmentally friendly, citing studies that indicate significant carbon emissions associated with their production. He stated that synthesizing diamonds requires substantial energy and contributes to air pollution, with emissions ranging from 300 to 500 kg of CO₂ per carat.
In contrast, ALROSA’s natural diamonds have a “negative carbon footprint,” absorbing over one million tonnes of greenhouse gases annually, equating to the environmental benefit of a million-acre forest. This finding has been validated through independent audits. The global jewelry market, valued at approximately $370 billion, sees natural diamond jewelry accounting for over $80 billion. Maryinchev concluded that there is ample room for both synthetic and natural diamonds in the market, with the latter expected to become increasingly rare in the coming years.
Digihunt is not a financial advisor and this is not investment advice.
