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India looks at Southeast Asian markets to boost polished diamond shipments

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As the Chinese economy slows down, India’s diamond exporters are looking at Southeast Asian markets such as Vietnam, Cambodia and Thailand, where Covid-19 restrictions are being eased, to increase shipments of polished diamonds.

Diamond exports bounced back to pre-Covid level in the first six months of this financial year and traders are expanding their presence in Southeast Asian nations to maintain the momentum.

“The diamonds that are exported to China from India are further exported to other nations from the country,” Sabyasachi Ray, executive director, Gem & Jewellery Export Promotion Council (GJEPC), told ET. “Nearly 60-70% of the diamonds imported by China are exported and the rest 30-40% are used for domestic consumption. The Chinese economy’s slowdown is going to impact the domestic consumption of diamonds by the Chinese.”

China’s economic growth is losing steam under pressure from a construction slowdown and power shortages, prompting warnings about a possible shock to its trading partners and global financial markets.

Vipul Shah, Managing Director of diamond exporting firm Asian Star, said: “Now that the other Southeast Asian markets are opening up, we can now export to these countries. Moreover, there is a supply constraint of rough diamonds and the stock in the pipeline is very less. The demand for polished diamonds is very robust in the global markets.”

Exporters said prices of rough diamonds have shot up 7-8% due to supply constraints but prices of polished diamonds, which are exported, have remained stable and not shown any upward trend.

Gross exports of cut and polished diamonds grew 21,91% year-on-year in September to $1,907.3 million and 22,04% in rupee terms to Rs 14,028.04 crore.

During April-September, cut and polished diamond exports grew 26.98%, as compared to April-September 2019, to Rs 91,489.2 crore. In dollar terms, the growth was 20.24% to $12.4 billion, according to the GJEPC data.

In a survey by the National Diamond Council (NDC), diamond jewellery topped the list of most attractive luxury goods as consumers remain loyal to natural diamond jewellery.

As per preliminary estimates by the NDC, global diamond jewellery sales could exceed $90 billion in 2021, representing a 23% year-on-year increase.

In the two largest jewellery markets, the US (which accounts for 45% of global sales) and China (20% of global sales), demand for jewellery has risen 50% and 10% respectively, compared to the 2019 levels.

Courtesy: Economic Times

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