With the severe recession storming the diamond industry, India has witnessed a decline in exports to major hubs like the United States and China. To combat this, Surat, the Diamond City of India, will host a two-day visit for twelve diamond manufacturers and merchants from the United States.
Why the recession?
The plunging fall in the price of rough diamonds can be attributed to two important reasons.
To begin with, the Russia-Ukraine war has placed severe sanctions and trading regulations in major import hubs of the West, such as the US, with Russian-originating products and services. The US is the largest market for finished diamonds. A third of Surat’s rough diamonds are obtained by mining in Russia. Hence, a hold has been placed between the US and Surat’s diamond bourse.
Furthermore, Vipul Shah, Gems and Jewellery Export Promotion Council (GJEPC) Chairman, attributes the declining market to the US market’s aversion to mid-segment diamonds. More importantly, the demand for lab-grown diamonds is on a surge. The aforementioned largest market of finished diamonds, the US, has millennials straying away from natural diamonds. Facing their own economic recession, American citizens find objective value in the expenditure of lab-grown diamonds.
The US Diamond Envoy’s Surat visit
In a bid to boost India’s diamond exports, the Gems and Jewellery Export Promotion Council (GJEPC) will host and sponsor the entirety of the visit. The event will kick off on Tuesday, with the manufacturers and buyers visiting several Lab Grown Diamond (LGD) factories in Surat. To avoid any more financial burden, the local participants will be charged only a nominal token amount to encourage their participation.
Vijay Mangukiya, regional Chairman of GJEPC, explained the purpose behind the visit. He outlined how the buyers will get a private tour of the factories, which will develop good faith between the parties involved. They will get to witness the entire process of diamond manufacturing, from growth to cutting to polishing, thereby exposing them to the sustainable practices and models followed by Indian manufacturers. Thus, not only does this visit aim to “bridge the trust gap and foster stronger global partnerships”, but it will also help the LPG industry in India build a positive and lasting global image.
The eight LGD factories GJEPC has shortlisted for the visit are Bhanderi, Green Lab, C6, Janvi, Dhanush, Nakshatra, Keeva, and Meera.
What makes Surat the ideal host?
Surat’s diamond and gems industry is one of the biggest in the world. About 90 per cent of the world’s diamonds are polished in the city. In recent times, the Surat Special Economic Zone reported a decline of 65 per cent in Surat’s total exports. The prices of rough diamonds and manufacturing polished diamonds have increased. In opposition, the retail price of selling polished diamonds has not. This has thinned out profit margins, leading to less turnover within Surat.
Speculation within the polished diamonds industry of Surat grows as the situation typically expected to resolve within 3-4 months hasn’t. Now, polished diamond factories are operating at a meagre 60 to 70 per cent capacity. Industry giants hope that the US buyers’ visit will establish stronger relations and facilitate trade within the region.
