Even as the country’s polished diamond exports declined in the first two months of the current fiscal, the diamond industry is pinning its hopes on the forthcoming budget for a boost to its business.
According to data from the Gems and Jewellery Promotion Council, India’s polished diamond exports dropped by 8 per cent during April-May period to 5.41 million carats against 5.9 million carats in same period last year.
“We are hopeful of some positive announcements in the budget, which would boost the business. Demand will pick up in the second and third quarters,” said Vipul Shah, Chairman, GJEPC, adding that April-June period has been a slower quarter.
Slackness in demand would also put pressure on rough diamond prices, which are likely to fall by 3-4 per cent in coming days.
Trader sources informed that rough diamond prices had increased in the range of 7-8 per cent in the past four months.
“Costly rough diamonds and costly imports have squeezed profit margins in the past few months. But we see growth of close to 10 per cent in the business for the current fiscal,” said Dinesh Navadia, President, Surat Diamond Association (SDA).
Currency ratesAlso, the currency rates have turned favourable for diamond exporters.
“Exchange rate is getting favourable as it makes diamonds affordable to buy for overseas buyers. Traders have started getting orders for the Christmas season,” said Agam Sanghavi, Director, Sanghavi Exports, leading diamond manufacturers and exporter in Surat.
Working capital and liquidity has been a major challenge for diamantaires.
“Liquidity situation has been tight for the diamond traders as banks are keeping a cautious stand for the sector,” said Shah.
To facilitate the diamond industry engage with bankers and resolve the issues regarding working capital, the GJEPC has organised a special conference of bankers and diamond players in Mumbai on June 28.
Traders from Surat and Mumbai will attend the conference, where chiefs of top banks, including Bank of Baroda, Bank of India, Corporation Bank along with Banking Secretary and chief of Export Credit Guarantee Corporation will remain present.