Unrest in US cities spark concerns among India’s diamond exporters

Kolkata: The unrest in the major cities of the United States over the death of an unarmed black man in police custody has sparked concerns among India’s diamond exporters, who recently resumed shipments to the country which accounts for 50% of the global gem and jewellery consumption.

“If the unrest continues for long, then it will have an impact on the exports to the US,” said Vipul Shah, managing director of diamond exporting firm Asian Star. “The pandemic has already affected our business across the globe. It is a trying time for India’s gem and jewellery export business.”

Shah said the industry is on a wait-and-see mode as far as the US is concerned. “Exports to Hong Kong and China have resumed though the numbers are less. It is only 25% of the business we generally do with the Far East,” he said.

Pramod Agarwal, chairman of the Gem & Jewellery Export Promotion Council (GJEPC), said: “We are yet to feel the impact of unrest in the US. Hopefully, things will settle down fast. We are worried about the rising unemployment in the US and the spread of Covid-19 there. Rising unemployment will take away the purchasing power of the Americans.”

The US has reported 40 million job losses since the Covid-19 outbreak.

The gem and jewellery sector contributes 7% to India’s gross domestic product (GDP).

Cut and polished diamond exports fell 22% to $19 billion in 2019-20 and 21% in rupee terms to Rs 1.32 lakh crore. However, gold jewellery shipments were up 2% to $12 billion and rose 4% in rupee terms to Rs 84,747 crore. Silver jewellery exports more than doubled to $1.68 billion or Rs 12,018 crore. Coloured gemstone exports, however, fell 19% to $321 million and 18% in rupee terms to Rs 2,272 crore.

“Diamond is a discretionary product and as lockdowns are eased we expect consumers to first focus on essentials, as record unemployment and closures affect their incomes,” said Colin Shah, vice chairman, GJEPC. “There is likely to be a temporary uptick, as pent-up consumer demand is addressed, but this would be transitory. All the studies show that we can expect recovery towards the end of 2020.”

Cortesy: The Economic Times