Amid Uncertainties, India’s Diamond Industry Continues to Adjust

SourcingMar 15, 2023

Amid Uncertainties, India’s Diamond Industry Continues to Adjust

The mood among diamantaires is fairly optimistic despite the challenges brought about by sanctions and a cloudy economic outlook.

20230315_natural diamond industry Venus facility.jpg
An external view of the Venus Jewel factory in India. Regarding current U.S. sanctions on Russian diamonds, Venus Jewel partner Devansh Shah said the company has been able to identify the origin of its diamonds for a number of years so it is, “easy for our customers to choose based on their preferences.”
Mumbai—The somber mood that prevailed across Surat and Mumbai early in the fourth quarter of 2022 seems to have given way to a sense of cautious optimism. 
Indian diamantaires are realigning their plans and adjusting to the uncertainties that cloud the current global outlook. 
Though sales in the U.S. market between Thanksgiving 2022 and New Year 2023 were not as buoyant as the prior-year period, most people in the industry feel the numbers do not paint an accurate picture of the strength of jewelry sales. 
The overall opinion seems to be that 2021 was so exceptional it should be a treated as an outlier, not a measuring stick. The results of 2022 may not have matched those levels, but it still was a fairly good year. 
Additionally, many companies realigned their production targets in March 2022, soon after Russia invaded Ukraine and the United States, subsequently, imposed sanctions on Russia
Initially this was seen as a short-term measure, but later most took a longer-term perspective, once it became clear the conflict was likely to be prolonged.
Production at India’s diamond factories, therefore, slowed over the last six to eight months. 
According to the Gem and Jewellery Export Promotion Council (GJEPC), exports of polished diamonds for April 2022-January 2023 (the first 10 months of the Indian fiscal year), were down nearly 10 percent in value terms and 23 percent in volume terms year-over-year. 
Similarly, imports of rough diamonds declined about 6 percent in value terms, and nearly 23 percent in volume terms.
The effects of continued uncertainty on both the political and economic fronts and the impact at both ends of the pipeline – affecting supply and hurting consumer sentiment – has been increasingly evident. 
Darshan Jariwala, president of Shree Creations, a wholesale retailer of natural diamonds in the United States that is familiar with Indian manufacturers, said, “Global conditions have had a significant impact. The supply chain has been disrupted, as the shortfall of raw material has pushed prices up, adding to existing pressure on consumer demand.”
Over the last few months, he reports that polished diamonds in sizes below 50 points (0.50 carats) moved better compared to larger goods, where the rise in prices of natural diamonds, coupled with the fall in prices of lab-grown diamonds, have affected sales of the former.
Other manufacturers also said there has been some resistance due to price hikes particularly in larger sizes. 
With inventory levels among U.S. retailers in these goods being higher, demand has slowed. 
However, many companies with established niches and long-term relationships said the impact of price fluctuations remains relatively limited for them.
Devansh Shah, a partner at Venus Jewel, said, “We currently see that sizes +2 carats to +3 carats and +7 carats to +9 carats are doing better than others, while round shape, D [color], FL [clarity] particularly are seeing shortages.”
According to him, the decline noticed in the recent past in demand for pique (heavily included) goods and dossiers (diamonds with grading reports) may ease as the Far East market is showing signs of opening up.
Shah also addressed the concern about U.S. sanctions on Russian goods. 
“We are compliant with the latest regulations and requirements from our customers. We have been able to identify the origin of our diamonds since many years now, so it is easy for our customers to choose based on their preferences,” he said. 
Another large supplier to the U.S., KBS Group, said it is providing clients with written assurances the polished has not been manufactured with rough sourced from Russia, based on their own verification, when possible, and on similar written assurances provided to them by suppliers in their network. 
Other large manufacturers also publicly have declared they have systems for tracking all stones from the time the rough diamonds are logged into their systems, thus ensuring segregation.
Most industry members and market observers assert that in India, Russian imports have dropped by about 30 percent in volume terms since April. 
Yet, it does appear some goods may still be going to the U.S. market on the basis of being “substantially transformed”—meaning cut and polished—in India. As a few diamantaires explained, decision makers have to balance the sanctions with the question of their impact on the livelihoods of a large number of artisans’ families.
However, this assortment of challenges has not set alarm bells ringing. 
Among the reasons: there are prospects of an immediate uptick in demand from China with an end to the zero-COVID policy and related lockdowns, and the surge in consumer demand for lab-grown diamonds, which is helping companies transfer some of the existing cutting and polishing capacity in and around Surat to this sunrise sector.
Moreover, prospects in the U.S. market are far from bleak. 
Sandeep Shah of KBS Group said after a period of some uncertainty in the middle of last year, various parts of the value chain started to adjust to the realities of inflation, a drop in consumers’ discretionary income and the rise in prices of raw materials. 
“Though the industry may not be bullish about the coming year, most are taking steps carefully and remain positive,” he said. “Everyone is keeping inventory light, and while offtake of polished may be slow for a few months, we feel H2 2023 will be better than H1.”
Nilesh Kothari of Jewelex also feels there is no immediate cause for concern. 
“U.S. retail sales were OK ‘til now, but buyers are now more cautious while replenishing goods currently. The slowdown in offtake may continue for some time. Polished diamond manufacturing in India is at lower levels now, but we believe that there will be a gradual pickup to some extent from Q3 onwards.”
In a similar vein, Shah of Venus Jewel said, “We expect 2023 to be better than last year as prices have now stabilized and markets are opening up, though economic and political factors may still have a high impact.” 
According to him, “there are plenty of opportunities … we have developed a number of strategies and tools” to tap into them.
There are many others exuding similar confidence in early 2023, buoyed further by positive signals from the just-concluded Hong Kong jewelry trade show.
 Related stories will be right here … 

The Latest

Timex ReWound video screenshot
WatchesSep 21, 2023
Timex Wants Your Old Watch

The company just rolled out “Timex Rewound,” a new takeback and resale program.

GIA logo
GradingSep 21, 2023
Retailers Warned About Fraudulent Email Purportedly From GIA

The lab confirmed it did not send the message.

Reginald Brack
AuctionsSep 21, 2023
Hindman Appoints New SVP, Director of Jewelry and Watches

Reginald Brack has worked at StockX and Christie’s.

Brought to you by
Top 5 Ways to Promote Safety and Security Awareness Among Your Staff

Awareness is essential to proactive protection. Learn how to promote and maintain safety and security awareness in your business.

The Artistry Ltd. 2024 catalog cover
MajorsSep 21, 2023
Artistry’s 2024 Catalog Has Shipped

It features colored gemstone, pearl, diamond, gold, and sterling silver jewelry styles.

Weekly QuizSep 15, 2023
This Week’s Quiz
Test your jewelry news knowledge with this short test.
Take the Quiz
Chemical vapor deposition reactors
Lab-GrownSep 20, 2023
Lab-Grown Diamond Outlook: Price Declines Aren’t a Deterrent

Some Indian manufacturers think the potential in this young, evolving market outweighs current price concerns.

The new Surat Diamond Bourse
SourcingSep 20, 2023
New Surat Diamond Bourse To Be World’s Largest Office Complex

The massive space spans 7.1 million square feet with more than 4,000 offices and 131 elevators.

Dialog Solutions
Brought to you by
A Conversation with Dialog Solutions

Do you always want the right diamonds at the right price in your store? Introducing Dialog, the world’s first diamond subscription service.

Sahyog entrance
Policies & IssuesSep 20, 2023
Creating a Brighter Future for the Differently Abled

GIA is among the supporters of a new school building for children with special needs.

Online holiday season shopping
SurveysSep 20, 2023
Why Bain and Deloitte Think Sales Will Grow This Holiday Season

From holiday spending to inflation’s impact, here’s what analysts are forecasting for the season.

Tiffany & Co. X Rimowa collaboration suitcase and jewelry boxes
MajorsSep 20, 2023
Tiffany Collabs With Fellow LVMH-Owned Rimowa

The jeweler and luxury luggage company have teamed up on jewelry cases and a suitcase.

Navneet Gems and Minerals portrait-cut ruby
GradingSep 20, 2023
Navneet Gems Introduces Portrait-Cut Rubies

The geometric collection is on view now at the Jewellery & Gem World Hong Kong Show.

Bleu Royal diamond
AuctionsSep 19, 2023
‘Bleu Royal’ Diamond to Fetch $35M-$50M at Auction

The 17.61-carat stone leads Christie’s “Magnificent Jewels” sale in Geneva this November.

Surveillance footage of bear spray robbery
CrimeSep 19, 2023
Man Sentenced to 6 Years in Prison Following Bear Spray Robbery

The suspect used bear spray to subdue employees and bystanders then stole $800,000 worth of jewelry.

Fuli Gemstones Fuli Cut
GradingSep 19, 2023
Fuli Gemstones Unveils New Peridot Cut

The ‘Fuli Cut’ is based on an antique cushion.

Erlend Bore discovers ancient jewelry
MajorsSep 19, 2023
Norwegian Man Uncovers Ancient Jewels with Metal Detector

The jewels, including gold rings and pendants, are said to be from 500 A.D.

Stock photo of Russian diamonds from Alrosa
Policies & IssuesSep 18, 2023
Grib Diamonds Among Companies Named in Latest Round of Sanctions

Grib is the Belgium-based subsidiary of Russian company JSC AGD Diamonds, which also was sanctioned.

Greenland Ruby rubies and pink sapphires
SourcingSep 18, 2023
Greenland Ruby Update Confirms Operational Suspension, Layoffs

The company anticipates resuming exploration and mining operations and rehiring staff in 2025.

A jewelry display at the New York City Jewelry and Watch Show
Events & AwardsSep 18, 2023
New York City Jewelry & Watch Show Announces 2023 Exhibitors

The antique and vintage jewelry and watch selling event is scheduled for Oct. 26-29.

Sotheby’s For the Boys: A Jewelry Exhibition men’s jewelry sale
AuctionsSep 15, 2023
Men’s Jewelry Takes the Spotlight in Sotheby’s Selling Exhibition

Frank Everett curated “For the Boys: A Jewelry Exhibition,” opening in New York City in September.

De Beers Mic Drop Seize the Day ad
SourcingSep 15, 2023
‘A Diamond Is Forever’ Is Back Again, Backed by $20M

De Beers is putting the emphasis on natural diamonds in Q4 and ending Lightbox’s lab-grown diamond engagement ring test run.

Lindsey Scoggins transformable tourmaline, diamond, and rose gold flower earrings
TrendsSep 15, 2023
Piece of the Week: Lindsey Scoggins’ Transformable Earrings

The brand-new style can be worn three ways.

A Gucci purse and a YSL purse
TechnologySep 14, 2023
EBay Is Diving Deeper Into the Pre-Owned Pool

The tech company is launching a consignment service for sellers of luxury fashion goods, starting with handbags.

Kendra Scott at Target rendering
MajorsSep 14, 2023
Kendra Scott Heads to Target

With prices starting at $15, the Kendra Scott at Target collection launches next month.

JCK Industry Fund
Policies & IssuesSep 14, 2023
The JCK Industry Fund Is Accepting 2024 Grant Applications

The fund provides grants to organizations that better the jewelry industry.

CD Peacock and Zillion logo
MajorsSep 14, 2023
CD Peacock To Offer Jewelry Insurance Through Zillion

The Chicago retailer will now offer in-store customers instant quotes and coverage.

Danecraft jewelry
MajorsSep 13, 2023
American Exchange Group Acquires Danecraft

The accessories conglomerate is expanding its reach in the jewelry industry.


This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy

Additionally, paste this code immediately after the opening  tag: