The slowdown in demand from the US and Europe has not impacted the diamond trade in Surat, Asia's largest diamond polishing hub, thanks to the diversified export market. This was not the case till recently.
Only two years ago, the diamond industry in Gujarat (which polishes over 95 per cent of the world's diamonds) was in trouble due to a drastic fall in export orders from US and Europe. But now there are newer markets.
"Development of Asian and domestic markets in the last couple of years has changed the dynamic. Asian market, which contributed merely 2-3 per cent to the trade a decade ago, has now risen to over 25 per cent.
Earlier, we were dependent solely on the US and Europe," said Surat Diamond Association (SDA) President Dinesh Navadia.
"The dependence on the US and Europe has come down," he added. Nevertheless, the US and Europe still account for a sizeable quantity of the diamond exports from the country. According to the Gems and Jewellery Export Promotion Council (GJEPC), among the Asian markets, Hong Kong accounted for the highest export of cut and polished diamonds from India between January and August, 2011, at $5,957 million.
It was followed by Thailand ($355.85 million), Japan ($173.41 million), Singapore ($151.03 million), the Republic of Korea ($36 million), Malaysia ($23.64 million) and Nepal ($1 million).
Exports of cut and polished diamonds to the US in the same period stood at $2,330.28 million, and Belgium (a key market) in Europe at $1,532.48
million.
The UAE was another top export destination for Surat's diamond merchants ($7,789.25 million).
Last fiscal, the UAE emerged as the largest importer of Indian diamonds, accounting for a 47 per cent share, followed by Hong Kong with 22 per cent and the USA with 11 per cent, as per the GJEPC.
"The impact of the slowdown in the US and Europe is not so hard this time, as it was in 2008-09. The people in the industry have spread out to smaller economies, which are very sturdy and steady in market terms," former SDA chief Rohit Mehta said.
According to an RBI report, the diamond industry in Gujarat accounts for 72 per cent of the world's processed diamonds and 80 per cent of India's diamond exports. Gems and jewellery exports in the country grew by 46.89 per cent last fiscal. GJEPC says the growth was driven by cut and polished diamonds.
As per government data, there are 6,547 diamond processing units in Gujarat, which employ about seven lakh people.
