China has returned to the diamond market for the first time after the pandemic. India hopes that this will help gems and jewellery exports bottom out and see positive growth in FY26.
The Hong Kong International Jewellery Show that ended on March 8 saw active participation by Chinese buyers. Chinese buyers were conspicuously absent in similar shows after the pandemic.
“We have seen Chinese buyers along with those from Vietnam and Cambodia were active in the show for the first time after the pandemic. China used to control around 22 per cent of global diamond demand and in the past few years it had come down to almost nothing as gold demand had picked up. We expect our exports to Hong Kong, through which Chinese buyers reroute Indian diamonds, to improve in the coming months as the trade has started restocking,” said Vipul Shah, past chairman of GJEPC.
According to Sabyasachi Ray, executive director of GJEPC, social media campaigns in China too had contributed to the lull in the diamond market in the past few years. However, De Beers and leading Chinese jeweller Chow Tai Fook have been working to improve the customer perception.
Indian exports of cut and polished diamonds had dropped from $9.3 billion in FY19 to $4.3 billion in FY24. Hong Kong is the second largest market for Indian cut and polished diamonds.
Better demand amidst supply constraints also saw rough diamond prices going by an average 4 to 5 per cent in the past few months.
“The exports in FY25 have already been washed out. We would see around 10 to 15 per cent decline in export value in FY25. However, we hope to bottom out soon and see a recovery in FY26,” said Ray.