Surat (Gujarat) [India]: On the 75th anniversary of India’s independence, there is bad news for the diamantaires of Surat, the world’s largest diamond cutting and polishing center. Inflation in the United States of America (USA), the largest diamond export market, has hit its highest level in 40 years, posing a significant challenge for the diamond industry as a result of its potential impact on consumer spending.
Diamantaires in Surat and Mumbai are concerned about the length of the downturn in the US economy and the impact that the lack of discretionary spending would have on the industry. Consumers in the US are likely to cut down on their purchases of diamonds due to the rising inflation, which has resulted in increased interest rates.
The US is the largest export market in the world for the diamonds manufactured in Surat. Over 40 percent of the polished diamond export is destined to the US per annum.
Industry sources said that the US is the largest market for the low-cost diamonds manufactured in Surat and other diamond cutting and polishing centers in the Saurashtra region. US consumers prefer low-cost diamonds in the bling jewellery made from silver and other metals.
Profit margins of the diamantaires have eroded since January 2022 due to the steep increase in polished diamond prices. Between January to March 2022, the diamond prices rose a whooping 50 percent and now they have bottomed out at 10 percent. The steep price rise is preventing consumers across the globe, especially in the US from purchasing diamond jewellery.
