Diamond industry analysts say that India's polished diamond exports will "certainly" drop in the coming months following the catastrophic earthquake and tsunami that struck Japan this weekend, which have already cost some 10,000 lives and created a potential nuclear disaster.

Until 2010, Japan was the world's No. 2 consumer of diamonds after the US. But even after China surpassed Japan as the No.2 consumer market for diamonds, Japanese demand remained strong. In January 2011 the country imported 199,000 carats of diamonds from India valued at $33.1 million – a 46.2% increase over the corresponding month of 2010.

The Times of India quoted Gems and Jewellery Export Promotion Council (GJEPC) Vice Chairman Sanjay Kothari saying that polished diamond demand from Asia was "robust" and expected to increase by 2015, but that the Japan disasters would drive down India's polished exports.

A DTC sightholder corroborated Kothari's outlook, saying that there would be a "nominal effect on the diamond trade due to the Japan disaster."