Mumbai . Diamond exports are expected to cross $20 billion in the current fiscal as demand picks up after the first wave of the Covid pandemic in India. Revenue from exports reached $16.4 billion in the last fiscal. The fall in the lockdown stood at 12%, but the decline was halted by an improvement in the second half.
The income of diamond traders has increased by 20 percent. The Crisil report says that the consumption of diamonds and jewelery has increased in the US and China, which account for 75 per cent of India’s polished diamond exports. Restrictions on travel and reduced spending on hospitality ceremonies are mainly limited to spending on gift giving including diamond jewellery. This bodes well for India’s diamond exports.
Former stock rises: The pandemic has also improved the management of crude diamond inventories. The prices of the first rough rose faster than that of the polished diamond, leading to an increase in the stock.
Expected increase in exports every month
Rahul Guha, director, Crisil Ratings, says exports are on the rise and are expected to average $2 billion per month from October 2020. There will be some moderation in the second quarter of this fiscal. The festive season, which begins in the export destinations from the third quarter, will boost revenues to pre-pandemic levels. This will equate to a 20% increase in diamond exports from revenue this fiscal.
Small labour-intensive polishing units have faced 20-30% labor migration at the beginning of the second wave. The elders narrowed it down to 10% by providing safe transportation to employees. The current operating rate is over 80% this year with enough inventory to meet any production loss.