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US Wants to Oust Russia From Diamond Market, Expoils India: Experts
Around a 10 million Indians associated with the diamond industry in the western state of Gujarat face an “existential crisis” in the wake of 25% decline in India’s export of diamonds and G7 club of rich nations vowing to “restrict trade” in diamonds originating from Russia.
sputniknews.in
Around 10 million Indians associated with the diamond industry in the western state of Gujarat are facing an “existential crisis” in the wake of a 25% decline in India’s diamond exports and the G7 club of rich nations vowing to “restrict trade” in the precious stones originating from Russia.
In a major blow to India’s diamond sector, members of leading trade organizations have jointly recommended freezing the import of rough diamonds for two months, from 15 October to 15 December.
The decision came after a severe dip in polished trading amid slow retail sales in the US, increased competition from lab-grown diamonds, and a fall in China’s economy.
In a joint statement, the Gem & Jewellery Export Promotion Council (GJEPC), along with Bharat Diamond Bourse (BDB), Surat Diamond Bourse (SDB), Mumbai Diamond Merchants’ Association (MDMA), and the Surat Diamond Association (SDA), said that it will be a “voluntary” ban and not an outright prohibition on the import of rough diamonds.
India’s Diamond Exports Decline by One Quarter
Citing the mismatch in the demand and supply of diamonds, the diamond merchants said in their statement that India’s exports have declined by 25% over the period of January to August, with a similar trend for the month of September also.“Demand for loose polished diamonds and jewellery from large consuming economies such as the USA and China have been materially affected over the last many quarters, on the back of all-time highs of 2021 & 2022, with a visible slowdown in orders”, the statement reads.
In this handout photo released by the Russian diamond producer Alrosa, a view shows a rare 242-carat rough diamond, which will be offered at the 100th international auction of Alrosa in Dubai on March 22, 2021
© Sputnik / Alrosa
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Nitin Kedia, general secretary, All India Jewellers & Goldsmith Federation (AIJGF), told Sputnik India that while India has an adequate stock of rough diamonds to supply, there has been a significant downfall in demand and the country's diamond export in calendar year (CY) 2023.
“This has resulted in a pile-up of inventories and a drop in prices due to the supply-demand ratio. Hence, the representative of the diamond industry had requested the government to put up a ban for two months on the import of rough diamonds”, Kedia said.
“In these two months domestic players may focus on under-utilized markets to deleverage on USA”, Kedia added.
Impact on Other Countries
India is the largest importer of rough diamonds, followed by Belgium and the United Arab Emirates.Diamond merchant Rameshbhai Zilriya, president of the Diamond Workers Union Gujarat, told Sputnik India that gemstone imports from Russia make up 29% of India's total raw material diamond imports, while the US, China, and the UAE are the main markets for India's diamond jewellery.
Moreover, the US Treasury Department last month froze around $26 million in funds belonging to Dubai-based offshore firms owned by Indian businesses due to alleged links with Russian diamond companies.
Is it a good time to invest in diamonds? Your take on this.
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