Natural diamonds have experienced a notable price drop of 25-30%, mirroring the challenges faced by the industry. The Times of India reports that several factors, such as higher gold prices, a slowdown in the US economy, and changing consumer behavior in China, have contributed to this decline.
Surat, a key center for diamond processing and employment, has felt the impact deeply. Ashok Gajera, Chairman and Managing Director of Laxmi Diamonds, told ToI, “The downturn has affected everyone from the 38,000 workers in Surat to small, medium, and large businesses.”
Businesses are now grappling with devalued diamond stocks, struggling to meet orders without incurring losses. Gajera highlighted, “Diamond prices have been decreasing for the past 22 months.”
While early 2023 saw a slight increase in rough diamond imports to India, suggesting a potential recovery, this optimism faded quickly due to an oversupply issue in the market.
Moreover, competition from flawless lab-grown diamonds has diminished demand for imperfect natural diamonds. Gajera explained, “China, once a major buyer of flawless mined stones, has significantly reduced its purchasing power, now accounting for only 10-15% of previous levels.”
Data from India’s gems and jewelry sector reveals a decline in gross exports, amounting to $4,691.6 million (Rs 39,123 crore) during April-May, marking a 5.9% decrease from the previous year. Specifically, exports in the cut and polished diamonds sector dropped by 15.5% to $2,627 million. Similarly, provisional exports of polished lab-grown diamonds fell by 15.5% to $204.2 million from $241.6 million during the same period last year.
