India’s gems and jewellery exports in August have dived as a combination of negative influences — protests in Hong Kong, rising demand for synthetic diamonds in the US and tariff wars — weighed on the industry.
Exports fell 12 per cent, with cut and polished diamond shipments the worst hit, logging a 23 per cent decline.
In the five months of FY20, exports declined 6 per cent to Rs 1.07 lakh crore.
Cut and polished diamond exports in the same period have come down by 17 per cent to Rs 58,178 crore.
By contrast, gold jewellery exports have shown 9 per cent growth in August as prices of the yellow metal went up and the rupee depreciated against the dollar. In the first five months of FY20, gold jewellery exports climbed about 2 per cent. A senior trade executive said that imports of rough diamonds have fallen 38 per cent in the current financial year.
“Therefore, exports too will fall in tandem. Moreover, people are not confident about the global market conditions,” he said. Synthetic diamond sales are increasing in the US, affecting shipments of natural diamonds from India, he said.
Unrests in Hong Kong have affected exports of diamonds from India. Hong Kong is a major diamond trading centre.
The northeast Asian financial hub buys diamonds from India and manufactures studded jewellery sold in the US and China. “But the US-China trade war has affected exports from Hong Kong. Moreover, the unrest in Hong Kong has affected regular business as well. All these put together have affected Indian cut and polished exports,” explained Sabyasachi Ray, executive director, Gem & Jewellery Export Promotion Council (GJEPC).
While exports have taken a hit, the industry believes that Indian diamond trade will benefit as the US has imposed a 10 per cent duty on Chinese gems and jewellery items from September 1.
Items that will come under this tariff net are diamonds, cultured and natural pearls, rubies, emeralds, and sapphires, synthetic precious stones, including diamonds, silver jewellery, gold necklaces and neck chains and religious jewellery.
Courtesy - Economic Times