The diamond industry has decided to cut back on the import of rough diamonds due to shrinking margins and the tight financial situation.

The decision was taken in a meeting attended by Gem and Jewellery Export Promotion Council, Bharat Diamond Bourse and Mumbai Diamond Merchants Association here on Tuesday.

The current market scenario that is witnessing a fall in demand for polished diamonds, coupled with rising costs, has put traders under pressure, mainly those in the mid-segment of the diamond value chain, said GJEPC in a statement.

The decision will be reviewed after a month. This apart, it added, margins are shrinking with prices of rough diamonds rising sharply while that of cut and polished variants having remained stable.

“Traders have reviewed the market situation and have unanimously decided to defer the option of banning rough diamond imports completely, like in November 2008. It was decided to encourage self-discipline by traders in import and purchase of rough diamonds, based on their inventory and demand for polished diamonds,” GJEPC said.

Traders have also decided to lead a delegation to meet the miners and review the situation. The delegation will also meet bankers to enhance finance limits besides moving the government for policy measures.