In the wake of the plunge in gem and jewelry exports following the global recession, Indian diamond exporters are focusing on the domestic market to boost business.

The Hindu Business Line reports that diamond exports, which were rising at about 5-6% for the last few years, declined by about 7-8% to $13.02 billion in 2008-09 from $14.2 billion in 2007-08.

Vasant Mehta, Chairman of India’s Gem and Jewelry Export Promotion Council (GJEPC), noted that diamonds account for nearly 75% of the total gem and jewelry basket and the consumption of diamonds in the domestic market has been growing by over 100% in the last five years.

Mehta added: “We do not expect the exports to pick up if there is no turnaround in recession by August-September. However, in 2010-2011, the situation should improve and diamond exports can grow by 5% per cent again.”

Referring to the growth of diamond consumption in the Indian domestic market, Mehta noted: “Even till a few years back people in our country preferred gold over diamond as it could be traded easily. But over the last five years we have witnessed demand for diamond growing fast.”

Mehta indicated that the GJEPC is interested in venturing into new markets such as China, the CIS countries and West Asia to compensate for reduced US demand.

Gem and jewelry exports to the US accounted for 25% in 2007-08, and dropped to 20% in 2008-09. The highest importer was the UAE at 31%.