Gems & Jewellery News

Indian traders to stop rough diamond imports for 2 months as demand dips

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The Indian diamond trade has decided to stop imports of rough diamonds from mining companies like De Beers, Alrosa, Rio Tinto, and Dominion for two months from October 15 amid slowing demand for cut and polished diamonds in the US and China.

India cuts and polishes nine out of 10 diamonds available in the world.

The decision was taken after more than 100 diamond manufacturers, traders, importers, and exporters from Mumbai and Surat reviewed the situation on Tuesday.

It will help the industry reduce its polished stock inventory, protect financial health of the trade, and save jobs of nearly two million workers, industry officials said.

“It was assessed that halting imports of rough diamonds will help the industry better manage the balance between demand and supply, thereby protecting the value of assets and increase consumer confidence,” said Vipul Shah, chairman of Gem & Jewellery Export Promotion Council (GJEPC).

They will review the situation in the first week of December 2023 and then decide the future course of action, trade insiders said. Apart from GJEPC, members from Bharat Diamond Bourse, Mumbai Diamond Merchants Association, Surat Diamond Bourse, and Surat Diamond Association participated in the meeting.The trade had taken similar moves during the Lehman Brothers collapse in 2008 and during the Covid-19 pandemic.

Trade insiders said mining companies generally keep selling rough diamonds they mine to the cutting and polishing industry – also known as ‘midstream’ – irrespective of the state of demand. This puts the onus on the midstream to keep track of the real demand and transmit their need for supply of rough diamonds to mining companies, they said.

“Taking these dynamics into account, we have already reached out to all the major diamond mining companies, sharing with them the current challenges that are faced by the midstream and requesting them to support the industry with a prudent and responsible approach in their offerings to their respective customer base,” Shah said.

In Tuesday’s meeting, the industry was unanimous that stopping imports of rough diamonds from October 15 to December 15 in important to protect their interest, particularly that of the small and medium enterprises, trade insiders said.

Meanwhile, gross exports of cut and polished diamonds stood at $7,028.31 million during April-August FY24, a decline of 30.27% from $10,079.94 million in the first five months of FY23. The same trend is continuing in September, too, industry officials said.

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