Editor’s Note
India’s diamond industry is grappling with a severe downturn, marked by falling trade volumes, factory shutdowns, and significant unemployment. This report examines the structural challenges, from payment defaults to the rising competition from lab-grown gems, that threaten a cornerstone of the country’s export economy.
India’s diamond sector is facing a severe crisis as a sharp decline in both imports and exports over the past three years has led to payment defaults, factory closures, and massive job losses, according to the economic research institute GTRI. The institute noted that while export earnings have increased, a reduction in orders and growing competition from lab-grown diamonds are leading to a buildup of unsold, unprocessed rough diamonds.
He stated that immediate steps are needed to address these problems and secure the future of the sector.
According to the economic research institute’s data, a 24.5% decline in rough diamond imports from USD 18.5 billion in 2021-22 to USD 14 billion in 2023-24 reflects weak global markets and lower processing orders.
Lab-grown diamonds are believed to be more affordable and sustainable.
GTRI also noted that Dubai does not produce diamonds, yet its share in India’s rough diamond imports is consistently increasing. Dubai imports rough diamonds from Botswana, Angola, South Africa, and Russia and then re-exports them to India. The Indian diamond industry involves over 7,000 companies engaged in various activities like diamond cutting, polishing, and export.