India’s Diamond Trade Continues to Recover

Mumbai: Diamond trading in India improved in January, according to official data, as the country’s manufacturing sector continues to recover from a liquidity squeeze in the final months of last year.

Imports of rough diamonds, an indicator of demand from India’s large cutting-and-polishing sector, jumped 28 percent to $1.26 billion during the month, according to the Gem & Jewellery Export Promotion Council (GJEPC). Rough exports grew 38 percent to $147.9 million, meaning net rough imports – the excess of rough imports over exports – rose 26 percent to $1.12 billion.

Rough demand slumped toward the end of 2016 following the government’s decision in November to invalidate high-value currency. The decision mostly impacted small and medium-size factories that usually pay workers in cash, explained Sabyasachi Ray, the Council’s executive director.

More recently, these businesses have started shifting to electronic bank payments, easing the pressure on the sector, Ray added.

Mining companies noted a similar rise in rough demand in January, with the De Beers sight valued at $720 million – its largest sale in 30 months, according to Rapaport records. Demand for smaller diamonds, driven by India’s manufacturing sector, started to pick up during the month, De Beers chief executive officer Bruce Cleaver said after the sale.

India’s exports of polished diamonds increased 3 percent to $1.62 billion in January, while polished imports fell 13 percent to $171.5 million. Net polished exports increased 5 percent to $1.45 billion.

India’s net diamond account – the difference between net polished exports and net rough imports – slid 33 percent to $329 million.