India is well recognized as the world’s diamond maker, shining and polishing over 90% of the world’s diamonds every year. In 2019, India exported cut and polished diamonds worth US$ 18.66 billion, accounting for 64% of the total G&J export. The Indian diamond market, however, is fully dependent on import of rough diamonds.
Outbreak of Covid-19 pandemic thus brought the Indian diamond industry to a grinding halt. April and May saw zero production with bolted factories. The migrant labor catering to the industry returned home and only 10% of the production resumed in June. With current sales dipping to 30%, the industry has decided to stop importing rough diamonds for the month of June, which is likely to get an extension.
With exports resuming in May, the industry is in the process of emptying the inventory, which is a positive marker for the industry. About 60% of India’s diamonds are exported to USA and 20 -25% are exported to China and Hong Kong. Markets have opened up in China and Hong Kong and around 60 – 70% of the exports have resumed in the territory while US and EU markets are opening slowly.
Despite the difficulties, Indian diamond industry has demonstrated great strength, taking care of the grass-root level artisans. All India Gem & Jewellery Domestic Council (GJC) raised funds amounting to Rs. 1.25 crores and extended a helping hand to over fifteen thousand needy craftsmen.
Leading lights of the sector accept that the industry will experience much lower sales this year but expect trade to pick up in the last quarter. GJC is working closely with several government ministries to bring reformative policies and enhancing ease of doing business. It has also garnered support from public sector banks to grant loans to support Covid hit MSMEs.
Overall it can be said that all possible steps are being taken by the government and industry bodies to boost the sector. While the Diamond sector leaders agree that the present times are challenging, they also have a positive outlook for the future. Ajoy Chawla, CEO – Jewellery, Tanishq – Titan, said:
“We are experiencing very good recovery. Almost 70% of our sales have resumed. Although gold is leading the show, diamond demand is also rising steadily.”
Resonating similar sentiments, Ghanshyam Dholakia, Founder & MD, Kisna Diamond Jewellery & Hari Krishna Group opined:
“Diamond is the ultimate symbol of love and luxury. It is young generation’s gem of choice. Despite the upheaval global diamond prices are stable. India’s diamond sector is strong enough and capable of waiting out this temporary slowdown. With limited or no avenues for travel and lifestyles spends, I envision good opportunities for diamond market in near future.”
Above views have been drawn from ET BJwelled panel discussion, “Overview of Industry – Diamond Markets”.