With G7 countries putting constant pressure on the Indian diamond trade on the origin of rough diamonds that the country cuts and polishes, exporters are now seeking to step up sales to China, which has slowed down its diamond purchases in the past eight months. Cut and polished diamonds are a major foreign exchange earner for India.
India’s diamond exporters are expecting demand from Chinese buyers for the country’s cut and polished diamonds at the Hong Kong Jewellery & Gem Fair, which is being held from September 20-24. Exporters are all set to negotiate prices with Chinese buyers as they want to clear the inventories, said industry executives.
A rough diamond that was selling at $2,500 per carat at the start of 2022 is now being sold around $1,750, they said, adding that this has forced diamond manufacturers to sell polished stones at lower prices.
China buys diamonds ranging from 1.2 to 10 carats. “We will be having dialogues with the Chinese buyers as China is the second largest destination for Indian cut and polished diamonds,” said Kirit Bhansali, vice-chairman, Gem & Jewellery Export Promotion Council.
The council is also organising roadshows in Vietnam, Saudi Arabia and South America so that Indian diamonds sell in these countries which in turn can save two million jobs in the diamond hub of Surat. There are other smaller cutting and polishing centres across Gujarat, such as Saurashtra, Amreli and Bhavnagar, which are also suffering due to less demand from the global markets.
Traders said the Indian diamond trade is facing huge problems in the US, where high-profile luxury jewellery players, including Richemont and LVMH Moet Hennessy Louis Vuitton, have told suppliers they wouldn’t buy Russian stones, putting the onus on suppliers to disclose the provenance of the gems.
It is not only the economic slowdown that has brought down shipments of diamonds to the US, the largest importer from India which cuts and polishes nine out of 10 diamonds available globally. “The fear of sanctions and absence of clarity are impacting the trade,” Bhansali said. “Talks are going on at the government level with the G7 nations on how to deal with the US sanctions on Russian diamonds that originate from the country’s Alrosa mines.”