The nation, which is the world’s top polishing hub, reported an almost 10% decline in cut and polished diamond exports to $22 billion in the financial year ended March, driven by inconsistent Russian rough-diamond supplies and softer demand in key global markets. Those challenges will prolong sluggishness in sales this year, said Vipul Shah, chairman of the state-backed industry group.
“It is going to be a difficult year,” Shah said in an interview with Bloomberg Television Wednesday. Elevated inflationary pressures in the US, China’s slower-than-expected recovery after pandemic restrictions lifted, and volatile gold prices will make it “tough and challenging” for Indian diamond merchants, he said.
“Supply is also one of the constraints,” while factories in the key hub of Surat, Gujarat state, have been slow in building inventories, with working shifts staggered in light of the weak demand, Shah said.
India, which considers Moscow a close political and trade partner, imports oil, weapons and commodities from Russia despite the threat of sanctions due to the war in Ukraine. Shah’s group is in talks with the Indian government to resolve a payment issue with regard to procuring rough-gem supplies from Russia, he said.
Still, the industry’s biggest challenge was waiting for “the US economy to pick up, consumer demand to pick up,” Shah said.
