After having experienced sleepless nights during global slowdown in 2008, the Surat diamond industry seems to have played safe as far as US, the biggest diamond jewellery market, is concerned. Even as the entire world is keeping a close watch over US debt crisis, the Diamond City of India has exuded confidence that the current situation in US is unlikely to have any effect on diamond business. The reason: diamontaires have reduced their dependence the US market by partially shifting its export focus from US to the Asian nations post global turmoil couple of years back.

It may be mentioned here that the recession in 2008, largely triggered by financial crisis in US, left the Surat diamond industry in deep trouble with hundreds of diamond cutting and polishing units bringing down their shutters and subsequently thousands of labourers losing their jobs.

Once bitten, twice shy, the diamond exporters started scouting for new markets to reduce their dependence on US markets. As the industry players say diamond exporters this time have been saved by a whisker from facing a 2008-like situation as they had reduced their dependence on the US market for exports. "It is because we have shifted our focus from the US to the Asian nations including the domestic market, that we are almost insulated from the uncertainties in the US market. As of now we do not see any major impact of the US credit rating downgrade on the diamond export operations," said Champak Mehta, managing director, C Mahendra Exports Ltd, a diamond exporter.

It was after the global slowdown that the diamond exporters decided to find out an alternate to the US market. "The diamond traders learnt a lesson from that crisis. US was considered as a major export market then with about 60-65 per cent of total exports going to US," said Pravin Nanavati, a diamond expert and former president of SDA.

"Now, the exposure to US market has declined to about 20-25 per cent. So even if the financial situation in the US remains a concern, the diamond industry would largely be insulated from that," Nanavati added. Agreed Dinesh Navadia, president, Surat Diamond Association (SDA), "As of now we do not see any major impact of the US credit rating downgrade on the diamond exports. This is because we have better businesses coming from China, Hong Kong and other Asian and other Far-East nations. We are banking more on them than the US or Europe, hence there is no need to press a panic button as of now."

As per the provisional data provided by Gems and Jewellery Export Promotion Council (GJEPC), India's exports of cut and polished diamonds for the year 2010-11 stood at around Rs 128,000 crore (approx. US $ 28.2 billion).

However, the diamond industry is leaving no stone unturned to safeguard their business. In order to take a stock of the ongoing global financial situation after the US debt rating downgrade, The Surat Diamond Association (SDA) on Monday convened a meeting of leading diamond exporters, industry experts and business consultants to discuss the implications of the US crisis on the diamond trade and chalk out a future strategy to ward off any of its impact.