India's Diamond Industry Seeks Support to Overcome Temporary Headwinds from China

India's diamond cutting and polishing industry, the world's largest, has faced some headwinds recently, but industry leaders remain optimistic about the sector's long-term prospects.

"We're battling weak demand, particularly due to China's slow recovery from COVID-19. As a result, demand continues to fall," said Vipul Shah, chairman of the Gem and Jewellery Export Promotion Council (GJEPC). China is a major market, accounting for around a third of India's cut and polished diamond exports.

However, the industry is taking proactive steps to address the challenges. "The industry is in trouble, and last month it requested the government to provide a few concessions in this year's budget so it can sail through the ongoing rough weather," Shah said.

Specifically, the GJEPC has urged the government to allow the sale of rough diamonds in Special Notified Zones (SNZs) and give permission to globally recognized diamond trading houses to operate from these zones. This would help Indian diamond manufacturers access rough diamonds more easily and compete on a level playing field with international buyers.

Despite the current headwinds, the diamond industry remains a vital part of India's economy. It employs over 4.3 million people and accounts for more than 10% of the country's goods exports.

"We are confident that with the right support from the government, our world-class diamond cutting and polishing capabilities will help us navigate this period and emerge even stronger," Shah said.

India's diamond industry has weathered ups and downs before, and industry leaders are optimistic that with strategic interventions, the sector will continue to shine and contribute to the country's economic growth.