Diamonds to get dearer as rough stones cost more

DTC, the largest supplier of rough diamonds to India, said it has recently increased prices of rough diamonds by 8.5 per cent. There has been a price hike in good quality diamonds and as a result there will be a 4 to 5 per cent increase in the end products, said Chandrakant Sanghvi, regional convener for Gujarat, Gems and Jewellery Export Promotion Council (GJEPC).

He admitted that the higher cost of rough diamonds may impact the profitability of diamond units. According to industry estimates, over the last year, rough diamond prices have surged by around 25 per cent.

The surge in the input cost has already added to the woes of the Rs 50,000-crore Surat diamond industry, which has so far witnessed 2 lakh workers losing their jobs due to subdued business activity.

Bigger diamond cutting and polishing units may absorb the price hike as they have enough cash flow and are flush with bank finances to support their business. However, the rise in cost of rough diamonds will make it difficult for small units to operate.

"Out of the 10,000 diamond units, nearly 3,000 have downed their shutters due to a host of reasons