India’s diamond exports have borne the brunt of the global recession since October 2008 but industry players believe the ever-growing demand from China, other Asian markets and the UAE will offset the decline from traditional export markets.

Findings from a survey by the Government of Gujarat, which were published in the RBI Task Force Report of February 2009, revealed that about 4,300 diamond units have closed down and 413,000 diamond workers have lost their jobs since the onset of the global recession.



Another survey, released in November 2009, confirms those findings: over 400,000 diamond cutters across the country lost their jobs due to the dramatic decline in diamond demand from major export destinations – in particular the US, which was India’s biggest export market for polished diamonds until 2008. According to Commodity Online, India’s polished exports to the US in the first six months of fiscal year 2009/2010 declined by 30 percent compared to the same period in the preceding year.

The good news is that there is a huge spike in the demand for polished diamonds from the UAE, China and Hong Kong, which industry insiders believe could offset the decline in US demand. The UAE now outranks the US as the biggest buyer of Indian diamonds, while the polished diamond exports to the latter two markets rose by 9% in the first six months of fiscal year 2009/2010.

DTC sightholder Suashish Diamonds Ltd in Mumbai believes the solid demand from the Asian markets, in particular China, will continue well into the coming years. “The Indian diamond sector has seen a sustainable growth in demand in China. We, ourselves, also sell lots of loose diamonds to China via our Hong Kong office. In the years to come, I believe China is going to be the growth driver,” Siddharth Kedia, the company’s vice-president of marketing, told JNA.

"We expect our target markets -- China, Hong Kong, Vietnam and the domestic Indian market – to grow significantly. We believe the total market share of these markets will be equal to that of the US market,” he added.