Mumbai: India’s diamond manufacturers have decided to cut production by up to 30% to avoid inventory buildup in a slowing market, reports The Economic Times.

After a dismal last quarter, the country’s diamond industry, which accounts for about 80% of the world’s production of polished stones, is facing a gloomy start to the new fiscal, primarily due to a fall in demand for solitaires, or single large pieces of diamond.

Some in the cut and polish trade are even planning to extend their summer break, which starts from May, to six weeks from three so as to avoid inventory pileup.

“The last quarter has been very bad for the diamond industry. Most of them will clock losses in last quarter as the demand for solitaires that earn major revenues for the trade has almost disappeared,” Vipul Shah, chairman of Gem & Jewellery Export Promotion Council (GJEPC) told ET.

Shah said the immediate task at hand for the industry is to consolidate the business and avoid fresh losses. “Demand scenario has not yet improved. Our basic agenda now is to reduce the inventory so that the trade does not book losses,” he said. The Indian diamond industry had cut imports of rough diamonds last fiscal to arrest their fall in profitability, but the mea sure failed to do much as demand did not pick up.

For the April 2014 to February 2015 period, import of rough diamonds has dropped by 11.52% from the year-ago period to 1314.94 lakh carats.

Even though prices of polished diamonds have dropped by 10% -15% in the last fiscal, there has not been much pick up in off take.