Positive Sentiment Among Indian Diamond Manufacturers

After a slowdown in the early part of the Indian Financial Year (April 1, 2006 - March 31, 2007), manufacturing activity in the diamond sector in India has registered a turnaround during the last few months. The sentiment among major manufacturers and leading exporters is now more positive, and the industry is more confident of matching its performance of last year.

While this may appear to contradict the latest export-import data released by the GJEPC (Gem & Jewellery Export Promotion Council) that shows a decline of 17.33 percent in the total value of polished diamond exports, a closer look at the details is revealing.

Cumulative exports from manufacturing units in the DTA and SEZs during the April to October period of $5,635.36 million are just 0.01 percent lower than the $5,635.80 million in exports during the corresponding period last year.

The huge decline in the overall exports is actually a result of the changes in the import-export trade through the Bonded Warehouse scheme. Exports through this scheme are down 66.77 percent compared to last year, and imports of polished diamonds through the Bonded Warehouse scheme registered a decline of 67.81 percent compared to last year. As previously reported, last year the Bonded Warehouse scheme was used by diamantaires to bring back big amounts of polished that was lying abroad for some years due to policy restrictions, for reassortment and reclassification.

Overall polished diamond exports during April-October 2006 were $6,291.28 million, compared to $7,609.72 million in 2005. In carat terms, exports declined from 29.38 million carats to 21.45 million carats.

The value of rough diamonds imported over the same period stood at $4,635.98 million, down 11.83 percent compared to $5,258.06 million last year. In carat terms, rough imports fell from 102.47 million carats to 94.07 million carats.