When India passed their 2012 budget, it came with some tax increases as well as new taxes for members of the trade.
Existing import duty on gold bars, coins and platinum increased from two percent to four percent which is a 100% increase in the tax rate on these items.
A new tax was added of one percent on non-branded jewelry.
These materials used to make jewelry obviously cause the finished product to cost more, not good for 
the end consumer.
Like many countries in the world right now, the Indian government believes taxing citizens and companies allow them to increase their revenue.
Do the gold & gem workers sit down and take it? Nope, thousands of staff have gone on strike demanding the government roll back the taxes. Some have even gone as far as initiating hunger strikes.
If those taxes are not enough, Suart diamantaries (the largest diamond polishing center in the world by volume) are now being charged a professional tax from diamond manufactures and workers.
Things are clearly getting bad in India for the diamond and gem industry. The government wants a larger share of the pie.