Surat: After facing a two-month long recession post-demonetization, the world's largest diamond cutting and polishing centre in Surat is sparkling again. Buoyed by the rush of small and medium diamantaires to replenish their inventories, India's rough diamond imports has seen a phenomenal increase in January 2017.
If statistics provided by the Gems and Jewellery Export Promotion Council (GJEPC) is any indication, then the rough diamond imports in January 2017 increased by almost 30% to $1.2 billion compared to the same month in the previous year.
Industry experts said rough diamond imports rose in January 2017 after witnessing negative growth in November and December 2016 due to demonetization and small and medium diamantaires facing acute cash crunch.
The overall imports from April 2016-January 2017 totalled $14 billion compared to $11 billion during the same period.
The biggest reason behind increase in rough diamond imports was the fact that global diamond miners literally offered up to 25% discount on goods to tap Indian diamantaires, especially the big time merchants.
Industry sources said clients of leading diamond mining companies have literally hoarded rough diamond stocks, keeping in mind that the prices may zoom by mid of the year. However, the companies purchasing rough diamonds on discounts are not going to pass on the price benefit to the secondary markets in Mumbai and Surat.
For the industry that employs over 5 lakh diamond workers, lack of cash post-demonetization was a big issue, which had triggered liquidity crisis. Most small and medium diamond unit owners, who were operating in cash, turned mainstream by opening bank accounts and registering new companies.
"The market rebounded with the start of the new year. We have been getting positive feedback from across the country and abroad over the success of Valentine's Day festival. Now, the demand is only going to increase from the US, Hong Kong, China and Japan due to stability of global economy," GJEPC regional chairman Dinesh Navadiya said.
Source: timesofindia.indiatimes.com