In response to challenging conditions affecting the natural diamond pipeline, Indian industry associations have called on members to not import any rough for the next two months.
The voluntary moratorium will start on Oct. 15 and run through Dec. 15. The groups plan to assess the situation on Dec. 1.
Vipul Shah, chairman of the Gem & Jewellery Export Promotion Council (GJEPC), India’s umbrella group for the industry, says the action is intended to clear out the current oversupply of rough and polished gems.
“This was a unanimous decision from all the stakeholders in India,” he says. “We have to do what is right for the entire industry. We are seeing falling prices in both rough and polished. We feel if we collectively take action and stop prices from falling, that will boost confidence in the entire industry.”
He notes that India has had voluntary bans on imports four times in the past—most recently in 2020, during the COVID-19 pandemic—and each time the industry has acted collectively and stabilized the market.
A letter signed by the heads of the major trade associations said demand for diamonds has been “materially affected” in both the United States and China, after hitting all-time highs in 2021 and 2022.
India’s diamond exports dropped 25% for the January-to-August period compared with 2022, and the year-over-year decrease is projected to stay at that level for September, according to the letter. It also said that Indian factories should continue to cut and polish gems, but urged them to do so only from existing stocks.
It also called on producers to cut back their allocations.
“Mining companies are regularly selling the rough diamonds that are being mined—irrespective of the state of demand in the midstream,” the letter said. “We have already reached out to all the major diamond mining companies, sharing with them the current short-term challenges that are faced by the midstream, and requesting them to support the industry with a prudent and responsible approach in their offerings.”
Last week, Russian diamond miner Alrosa announced that it was suspending its next two rough diamond sales. De Beers spokesman David Johnson said that it “will continue to hold sights and will take a responsible approach to rough diamond sales, supplying to demand and providing sightholders with supply flexibility.”
On LinkedIn, industry analyst Edahn Golan said the proposed ban might put Indian sightholders in a tough spot. “One option is manufacture in Botswana or other locations,” Golan wrote. “However, that will defeat the purpose of this exercise.”
The India letter was signed by the heads of the GJEPC, the Bharat Diamond Bourse, the Mumbai Diamond Merchants Association, the Surat Diamond Bourse, and the Surat Diamond Association.
(Photo: Getty Images)
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