India’s polished diamond exports declined 37 percent year on year to $950 million in December 2012, the Gem & Jewellery Export Promotion Council (GJEPC) reported Thursday. By volume, polished exports fell 44 percent to 2.025 million carats during the month, while the average price ‎per carat jumped 14 percent to $469.12.

Imports of polished diamonds to India fell 49 percent to $581.24 million during December. Net polished exports, representing the excess of exports over imports, rose by 2 percent to $368.72 million.

Rough imports to India surged 35 percent to $1.762 billion during the month, while rough ‎exports fell 39 percent to $79.31 million. Net rough imports, representing rough imports less exports, increased 43 percent to $1.683 billion.

India’s December net diamond account, representing total exports less total imports, recorded a deficit of $1.314 billion, compared with a deficit of $817.34 million one year ago.

Polished Trade Slumps in 2012

For the calendar year, India’s polished exports declined 37 percent year on year to $16.986 billion with the average price of the polished exports up 15 percent to $504.94 per carat. Polished imports slumped 72 percent to $5.592 billion in 2012.

Weak demand from overseas markets and the import duty on polished diamond restrained the overall trade during the year. In January 2012, the government imposed a 2 percent tax on the import of cut and polished diamonds, after more than five years of duty free imports.

According to trade officials, the government’s move was aimed at curbing the widespread practice of round-tripping – whereby companies seek to boost turnover by the frequent import and export of the same diamonds in order to get additional bank financing – and the introduction of the import tax has helped curb round-tripping. Rough imports rose 4 percent in 2012 to $14.986 billion, while rough exports declined by 10 percent to $1.525 billion during the year.

India’s 2012 net diamond account held a deficit of ‎‎$2.067 billion, however, this was much narrower than the deficit of $5.724 billion in the previous year.