Surat Diamond Polishers Feel the Pinch as China’s Love Affair with Diamonds Cools

Surat : Diamonds cut and polished in Surat, India, are facing a double whammy – a slowing Chinese economy and a growing preference for plain gold jewellery among Chinese consumers. This has caused significant concern for the Indian diamond industry, particularly diamantaires in Surat and Mumbai, who rely heavily on China as a major export market.

“China’s economic slowdown coupled with the shift in consumer tastes towards gold jewellery has significantly impacted our polished diamond exports,” says a De Beers sightholder in Surat. “Hong Kong, which acts as the gateway for our exports to mainland China, is witnessing a decline in demand.”

China is the second largest importer of polished diamonds from India, following the United States. With a decrease in Chinese demand, Indian diamond polishers are facing a significant drop in exports. This concern is echoed by industry leaders across India.

“The recent De Beers rough diamond sales cycle reflects the overall sluggishness in the market,” says Nilesh Patel, a diamond company owner in Mumbai. “De Beers’ sales figures in April were down 18% compared to last year, highlighting the cautious approach businesses are taking due to the uncertain economic climate in China.”

De Beers, the world’s largest diamond miner, reported a decline in sales across the board in their latest financial results. Revenue dropped by 36% in 2023, with sales volume falling by 19% and the average price per carat decreasing by 25%.

While De Beers CEO Al Cook acknowledges the current slowdown, he remains cautiously optimistic. “We are seeing a slight uptick in rough diamond sales compared to the usual quiet second quarter. However, many businesses remain cautious due to the uncertain economic landscape in China.”

“The diamond industry is at a crossroads. Whether it can weather the storm of a cooling Chinese economy and changing consumer preferences remains to be seen. In the meantime, Surat’s diamond polishers are facing a challenging environment” said diamond industry analyst Aniruddha Lidbide.