Comments
Diamond export is set to plunge this fiscal on the back of weak demand and intense competition from cheap lab-grown diamond (LGD).
Cut and polished diamonds exports declined 15 per cent to $1.47 billion ($1.72 billion) largely due to geopolitical tensions in the June quarter, as per the Gem and Jewellery Export Promotion Council of India data.
Polished lab-grown diamond export declined 14 per cent in May to $120 million ($139 million) due to volatile demand and drop in prices.
Ajay Kedia, Director, Kedia Commodities, said India’s cut and polished diamond exports dropped nearly 15 per cent in the June quarter compared with the previous year, following a substantial 27 per cent decline in 2023-24.
The slowdown in Chinese economic recovery and change in consumers preference has dented demand. China accounts for about a third of India’s cut and polished diamond exports and primarily buys through Hong Kong.
India’s cut and polished diamond exports dropped nearly 15 per cent in the June quarter | Photo Credit: VIJAY SONEJI
India is the world’s largest centre for cutting and polishing diamonds, processing nine out of ten diamonds globally, which underscores the critical impact of declining exports on the industry.
LGD price cut
In May, the De Beers Group slashed LGD prices of its IJ colour (light tint of yellow or brown) lab-grown diamonds by 37 per cent to $500 per carat from $800 per carat. Earlier this year, it cut mined diamond prices by 25 per cent.
The brand now has three linear price points of $500 per carat stones, $600 per carat for GH (near colour less) stones and $900 per carat for the highest quality stones of DEF (colour less), reduced from $1,500 per carat.
Sandrine Conseiller, Chief Executive Officer, De Beers Brands, had said the company has passed on its savings to customers as the wholesale prices of lab-grown diamonds in the jewellery sector continue to decline.
These lower prices will ensure that the brand remains competitive within the fast-evolving sector, while continuing to offer high quality lab-grown diamonds produced with 100 per cent renewable energy, he added.
LGD Gains market share
Priced at 90 per cent below natural diamond, LGD now makes up for about 20 per cent of the total diamond market from nearly zero per cent in 2015.
Tanvi Shah, Director, CareEdge Advisory, said developed nations such as the US and Singapore along with China are investing heavily in lab-grown diamond production, which in turn is increasing competition at the international level.
However, he said India has advantages in terms of labour costs and increasing production capacity. India produces over three million LGD a year and accounts for 15 per cent of the global production. It is the second-largest producer of lab-grown diamonds after China.
In fact, the LGD exports are expected to grow 7-9 per cent to touch $1.5-1.53 billion in FY25, on account of increasing demand.
Shah said though competition is increasing, India has an advantage with its increasing production capacity and leveraging its market leadership position in the cut and polished diamond market.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.