Surat Diamond Exports Suffer Major 28% Decline in 2023-24

Surat, India’s diamond polishing center, has been hit hard by a significant decline in cut and polished diamond exports. According to data released by the Gems and Jewellery Export Promotion Council (GJEPC) on Monday, exports for the 2023-24 fiscal year dropped a staggering 27.58% to $15.96 billion compared to $22 billion in the previous year.

This sharp decline can be attributed to several factors, as explained by Vipul Shah, chairman of GJEPC.  High-interest rates, global inflation, and a slowdown in market demand, particularly in the United States and a post-Covid China, all played a negative role. Additionally, the ongoing war in Ukraine and the resulting uncertainty surrounding rough diamond imports from Russia further exacerbated the situation.

“The year was a challenging year for exports,” Shah said.  “The gem and jewellery industry was hit hard in the first half of the year by high interest costs, inflation, and slackening of market demand in the USA and lower growth in China after Covid.”

However, there are signs of hope for the future.  In an effort to explore new markets and stimulate exports, the GJEPC has undertaken several initiatives, including trade delegations to Vietnam, Cambodia, and upcoming visits to Latin American countries.

Shah also highlighted the positive impact of the diamond industry’s decision to halt rough diamond imports between October 15th and December 15th, 2023. This move helped address imbalances between supply and demand, leading to a rise in polished diamond prices in the final quarter of the fiscal year.

“Despite experiencing sluggish demand from key export markets like the USA, Hong Kong, and UAE, these regions still accounted for significant exports of $5.59 billion, $4.36 billion, and $1.71 billion respectively,” Shah said.  “The GJEPC is currently engaged in discussions with global diamond miners to encourage increased investment in generic diamond and diamond jewellery promotion in the US, China, the Middle East, and even India.”

The industry is pinning its hopes on a potential turnaround in US exports, with the largest US jewelry fair scheduled for later this month.  There is optimism that by September 2024, the diamond and diamond jewellery export sector will witness a return to robust growth.