New Delhi, Jul 5 (KNN) India's cut and polished diamond exports are experiencing a significant downturn, primarily due to weak demand from China, a key market for the industry.

Vipul Shah, Chairman, Gem and Jewellery Export Promotion Council (GJEPC), has indicated that the sector is unlikely to stabilise without government support.

As the world's largest centre for diamond cutting and polishing, India processes approximately 90 per cent of globally polished diamonds.

However, recent data shows a concerning trend. Cut and polished diamond exports fell nearly 15 per cent in the June quarter compared to the previous year, following a 27.5 per cent decline in the 2023/24 marketing year ending March 31.

China, which accounts for about a third of India's cut and polished diamond exports, has seen reduced demand due to several factors.

These include a slow economic recovery post-COVID-19, shifting consumer preferences towards gold jewellery, and a decrease in wedding celebrations.

In response to these challenges, the GJEPC has appealed to the government for concessions in this year's budget.

Key requests include allowing the sale of rough diamonds in Special Notified Zones (SNZs) and permitting globally recognised diamond trading houses to operate from these zones.

Currently, unlike competitors in Belgium and Dubai, Indian bidders cannot purchase rough diamonds from SNZs due to the absence of a tax waiver.

The industry's struggles have led to a reduction in rough diamond imports by Indian diamond units, attributed to both weak demand for polished diamonds and pressure on margins caused by softening prices.

This downturn is particularly significant given that India's gems and jewellery industry employs over 4.3 million people and contributes more than 10 per cent to the country's goods exports.

The sector's recovery remains uncertain without targeted interventions and improvements in global market conditions.

(KNN Bureau)