India exported $14.2 billion worth cut and polished diamonds between April to October this year, which is up by 14.6 per cent over last year.
While the small-time players in diamond continue to languish as a result of cash crunch induced by the Centre’s demonetisation scheme, the exporters are confident that polished diamond exports from India are only slated to rise in the coming quarter, in the range of 8-10 per cent. Explaining the situation P S Pandya, chairman of the Gems and Jewellery Export Promotion Council (GJEPC) said, “Polished diamond exports have been rising this year, and as such we are expecting the exports to register a double digit growth rate on a year on year basis in the coming quarter. The growth is likely to be in the range of 8-10 per cent banking on Christmas season demand.”
India has so far exported $14.2 billion worth cut and polished diamonds between April to October this year, which is up by 14.62 per cent (in dollar terms) over last year. In rupee terms it is up by 19. 07 per cent, as per data from the GJEPC. He further explained that nearly 93 per cent of the diamond industry in the country is export-based and hence there is unlikely to be a huge impact on the sector as a whole. Export houses get paid in dollars and hence do not have any cash crunch at the moment.
The cutting and polishing units in Surat have begun work, and big export houses have enough raw material with them to sustain a month or so, informed a Surat-based diamond unit owner. “The SME units are those that are affected as they tend to pay in cash for their transactions, and also those units that cater to the domestic market would be at a loss,” said the unit-owner. Vipul Shah, the past chairman of GJEPC and also the CEO & Managing Director of Asian Star Co. Ltd explained that most of the transactions in diamond exports industry have been channelised and even with demonetisation there is no problem with online payments to importers.
“Labour payments are at times made in cash as many are daily wage earners etc, and the challenge now is to convert these people into the banking system- by making electronic fund transfer,” he said. Shah further claimed that the role of the angadias who deliver diamonds and cash to their parties in Surat and Mumbai primarily has also been reduced. “From around 10-12 angadias, now it has been reduced just about one or two, and they are acting as courier service to remote places,” he said.
Meanwhile, apart from Christmas demand, diamond exporters are upbeat on Donald Trump’s ascension to the US Presidency. Trump’s domestic focused policies are likely to bring in more disposable income for Americans and demand as such is expected to rise. Domestic players, however, are likely to be hit severely as domestic retail sales of diamonds would be hit, agree industry veterans.