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The Indian diamond industry is set to focus on domestic markets and emerging markets in ASEAN countries in an attempt to neutralise the impact of reduced demand from the US and the European Union (EU).
The move came after it was reported that diamonds originating from Russia may be banned.
Vipul Shah, chairman of the Gem and Jewellery Export Promotion Council (GJEPC), said that the outcome of the ongoing discussions on future business prospects involving diamonds originating from Russia is still unclear.
"The intentions of the Western countries that they do not want to finance the Russian diamond business are clear. The government and industry are trying to work out the modalities of a fool-proof method of assessing the traceability of diamonds," Shah said.
He said that it is still unclear whether or not a ban will be imposed by the US and other developed economies.
"If this happens, we are preparing ourselves to switch focus to new and emerging markets, including ASEAN countries, Vietnam and Cambodia. In the recently concluded India International Jewellery Show, we had a participation of 2,100 buyers from 69 countries and business worth more than Rs 50,000 crore was transacted during this exhibition."
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Shah further added that the current demand from the US and Chinese markets is lower than the usual demand from these markets.
In 2019, global diamond production stood at 142 million carats amounting to $13.9 billion, while the value after grading, cutting and polishing was at $29.7 billion. The global jewellery market is currently valued at $79 billion, according to a report in the Financial Express (FE).
Amit Pratihari, vice-president De Beers Forevermark, one of the top three diamond producer companies in the world, said that the international diamond market is being affected by the inflationary tendencies and geo-political disturbances across the world.
"However, this is not a cause of concern for us as the Indian market is our main focus," he said.
He further added that the upcoming festival season could see a good demand because the diamond is perceived as a luxury product and an investment option.
According to the FE report, De Beers (Luxembourg), Alrosa (Russia) and Rio Tinto (British-Australian) are the top three diamond producers in the world. These three companies account for more than 60 per cent of global diamond production.
Russia has the highest diamond reserves in the world. In 2022, Russian diamond production touched 41.92 million carats, with Botswana and Canada ranking second and third with 24.5 million carats and 16.3 million carats, respectively.
In 2022, the market value for Russian diamond production has been estimated at $3.55 billion, while the market value of Botswana's production is $4.7 billion.
