Prices of rough diamonds have declined by 10-15 percent in Mumbai in the past few days. DTC boxes of Indian goods are traded now without any premiums.

The declines are understood to reflect strong price resistance to polished prices at the recently concluded India International Jewellery Show (IIJS) and to the downturn in global stock markets.

The 10 percent premiums on DTC's "Indian boxes" have evaporated and are now trading at a roughly three percent discount.

Mumbai market sources say this means polished prices will definitely stay at current levels even if they don’t head down. The situation will become clearer in the third week of August, after the BHP Billiton rough tender in Antwerp.

Manufacturers offering polished that has come out of high-priced rough are worriedly keeping an eye on the market. A sharp downturn in polished prices could have major consequences in the Indian diamond industry.

Currently polished diamond prices are holding. The IDEX Online global diamond price index is mostly flat in the past few weeks, hovering between 146 and 147.