‘Diamond industry to witness 15-20 pc dip in revenue in FY23’
   Date :26-Jul-2022

Diamond industry 
Business Bureau
INDIA’S diamond industry is likely to witness 15-20 per cent decline in revenue in this financial year due to falling demand and rising prices of rough gemstone globally, according to a report.
Revenue of the Indian diamond industry is set to be cut 15-20 per cent to USD 19-20 billion this fiscal, compared with a decadal high in the last financial year, following a double blow from falling demand and rising prices of roughs across the globe, Crisil Ratings said in a report.
While volatility in rough diamond prices is typically passed on to the polished diamond prices -- albeit with a lag due to the long operating cycle in the trade -- tepid demand has kept polished prices from fully catching up with rough prices this time around.
“This could squeeze the operating profitability of Indian diamond polishers by 75-100 basis points to 4-4.25 per cent this fiscal. Accordingly, interest coverage may weaken marginally,” Crisil Ratings Chief Ratings Officer Subodh Rai said. According to the report regarding China, a surge in COVID-19 cases has led to lockdowns in several regions in China, which is one of the largest consumers of Indian polished diamonds.
Further, it noted that inflation and opening up of other avenues of discretionary spending such as travel and hospitality will dampen demand growth in the US and Europe in the near term.
As for prices, the US sanctions on Russian diamond mining company Alrosa following the invasion of Ukraine has cut supplies of rough diamonds by almost 30 per cent. The state-owned company is the largest diamond producer in the world and the supply constraint will continue amid sanctions on Russia, the report said.