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India's diamond exports may fall 20% as China battles Coronavirus

India’s diamond exports may decline by 20 per cent this financial year as global demand weakens because of travel and trade restrictions to prevent the spread of Coronavirus.

Exports are unlikely to improve in January-March quarter, as 89,000 cases of Coronavirus are reported globally, the majority in China. The country cumulatively purchases nearly 40 per cent of India’s cut and polished diamonds directly and indirectly through Hong Kong, but businesses there have come to a standstill and factories are operating with 25 per cent-30 per cent of manpower, resulting in massive decline in output.

“India’s diamond exports could shrink by a fifth to around $19 billion by the end of fiscal 2021, from $24 billion in fiscal 2019, as the novel coronavirus (another name for the infection) outbreak amplifies sluggishness in global demand. Much of its impact would be seen in the financial year 2020. While the first half of the financial year 2021 would remain sluggish, there are some hopes for revival in the second half which eventually would keep the full year’s export figure flat,” said Rahul Guha, director at Crisil Ratings.

“We are expecting 15-20 per cent decline in overall gems and jewellery exports this year itself. The Chinese New Year was a complete washout. Export receivables are stuck for over two months. Sooner the recovery will be better for India’s overall gems and jewellery sector including cut and polished diamonds,” said Colin Shah, vice chairman at GJEPC. Courtesy - BS

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