Exports of cut and polished diamond have fallen 17.14 per cent in the first 9 months of FY20 which the trade attributes to the trade war between US and China, the two key markets for Indian exporters.
However, the continuing unrest in Hong Kong remains a worry for Indian exporters as well as leading Russian diamond miner like ALROSA.
“It is expected that the situation will improve after there is some movement in the US-China trade deal. In December, we have seen that there was some improvement in the Chinese market. However, inventories lying with the manufacturers first need to be offloaded,” Jim Vimadalal, director of India office of Russian mining major ALROSA, told ET.
“Rough diamond prices have stabilised after falling by 7 per cent-8 per cent since Diwali, which is good for the trade. Also, the signing of the ‘phase one’ agreement is expected to create a positive sentiment, which may help diamond exports,” said Vipul Shah, a leading diamond exporter and former chairman of Gem & Jewellery Export Promotion Council.
The December 2019 Rapaport Research Report also estimated a better 2020 for the trade.
“There is some optimism for the new decade. The industry can expect lower rough supply, market consolidation, further changes to the way diamonds are bought and financed, greater use of technology, an emphasis on ethical sourcing and segmentation of lab-grown and natural diamonds into distinct markets,” it said. The tariff war between US and China has already taken a toll on the Indian gem and jewellery exports. Overall gross exports of gems and jewellery declined 1.28 per cent to Rs17,337.52 crore during the month of December 2019 compared to Rs17,561.98 crore in December 2018. The overall gross exports of gems and jewellery declined by 4.37 per cent to Rs194,906.30 crore during April to December 2019 as compared to Rs203,812.21cr during the same period last year.
Cut and polished diamond exports in December 2019 declined by 3.92 per cent to Rs. 8926.58 crore from Rs 9290.78 crore in December 2018.