The Indian diamond industry ended its voluntary suspension of rough diamond imports on Friday following an improvement in the industry situation.
The ban was imposed on October 15 after prices and demand declined, following an announcement by the Gem and Jewellery Export Promotion Council (GJEPC) following an improvement in the situation.
Colin Shah, MD, Kama Jewelry, said the resumption of rough diamond imports after the two-month “voluntary ban” comes with a positive impact. “First, the stability in prices. Second, the inventory has eased,” he said.
Demand returns
With Christmas and New Year around the corner, demand for diamonds in the international markets has returned considerably. “Domestically, diamond prices have shot up 10 per cent in view of the wedding season. Consumption is stronger,” Shah said.
Announcing the decision to end the suspension last week, GJEPC Chairman Vipul Shah said the suspension helped in bringing stability to the diamond industry, which was affected by low demand. It had a positive impact on prices of polished diamonds over the past two months.
Colin Shah said in the long run, the price dynamics will continue to be influenced by the overall geopolitical and economic conditions.
The GJEPC and other industry associations decided to halt the import of rough diamonds to help the industry balance demand and supply and protect the value of assets, besides increasing consumer confidence.
Exports, imports down
This was mainly since demand for loose polished diamonds and jewellery from large consuming economies such as the US and China was affected and fresh orders slowed down due to the economic crisis.
According to GJEPC, gross exports of gems and jewellery during April-November this fiscal were $20,512.65 million (₹ 1,69,712.45 crore) down by 21.86 per cent (-18.45% in ₹ term) compared with $26,251.52 million (₹ 2,08,101.63 crore) in the year-ago period.
Gross imports of gems and jewellery were $13,550.873 million (₹1,11,999.97 crore), a fall of 23.83 per cent (-20.56% in ₹ term) compared with$ 17,789.64 million (₹ 1,40,995.19 crore) a year ago.