Editor’s Note
**Editor’s Note:** India’s diamond industry has called for a two-month halt on rough-diamond imports from mid-October to mid-December, its most aggressive intervention since the pandemic. The move, backed by five major trade bodies, aims to stabilize a market under pressure.
September 26, 2023
By Joshua Freedman
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The Indian diamond sector has recommended a two-month freeze on rough imports, its most drastic emergency measure since the Covid-19 crisis.
The pause will run from October 15 to December 15, five leading trade organizations said in a joint statement Tuesday. They came to the decision at a meeting of more than 100 industry representatives the same day, and said they would review the situation in the first week of December.
To read the full letter, click
here
.
The move is a response to the severe downturn in polished trading amid sluggish retail sales in the US, increased competition from lab-grown diamonds, and China’s economic slump.
Earlier this month, India’s
Gem & Jewellery Export Promotion Council
(GJEPC)
wrote to diamond miners
, asking them to be responsible about rough supply. At the time, GJEPC chairman Vipul Shah told
Rapaport News
that “further actions” might be necessary if the market didn’t improve by the Jewellery & Gem World show in Hong Kong, which ended on Sunday.
Since that letter, Russia’s Alrosa
canceled
its September and October sales and called on the trade to show caution. Meanwhile, activity was predictably slow at the Hong Kong fair’s diamond hall, as attendance and purchases by Chinese buyers were minimal, exhibitors reported.
The GJEPC has teamed up with the
Bharat Diamond Bourse
(BDB), the
Surat Diamond Bourse
(SDB), the
Mumbai Diamond Merchants’ Association
(MDMA) and the
Surat Diamond Association
(SDA) for the latest directive, which they insisted was a “voluntary” ban and not an outright prohibition on imports. The delayed start will enable a short window for importers to bring goods into the country if they wish to.
With exports down 25% from January to August, and a similar trend visible in September, polished inventories have increased and prices have declined, the organizations reported.
They put part of the blame on miners, which, they argued, regularly sell rough irrespective of the state of the midstream, believing that their customers will only buy when necessary.
The industry took similar steps in 2020, when Indian trade organizations recommended a range of
moratoriums
on rough imports as trading ground to a halt during pandemic-related lockdowns.
India’s rough-diamond imports dropped 3% year on year to $1.32 billion in August, while volume slid 14% to 12 million carats, according to data from the GJEPC.
The freeze will coincide with the November 12 Diwali festival, when factories in the Indian cutting city of Surat traditionally close for two to three weeks. Industry members expect the shutdown to be longer this year.
The organizations also called for measures to help artisans during the import pause, ensuring it does not affect their livelihoods.
Update, September 26, 2023: Additional information and comment from the official statement have been added to this article.
Main image: Rough diamonds. (Shutterstock)
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India to Pause Rough-Diamond Imports for Two Months
Joshua Freedman
[email protected]
Manufacturing
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