China's diamond market recovery boosts India's export optimism

The diamond industry in China is showing signs of recovery, which is bringing cautious optimism to India's diamond sector. The Chinese market is crucial for India, as it plays a significant role in the export of cut and polished diamonds. China's diamond market has faced challenges due to its economic slowdown and lower marriage rates, which previously led to a drop in demand. In 2022, China's diamond sales were about USD 5.7 billion and are projected to grow to USD 7.2 billion by 2030. The demand for diamonds in China saw a decrease of up to 50 percent, and wholesale prices fell by about 40 percent over the last two years. This downturn has heavily impacted India, which depends on the Chinese market for about a third of its diamond exports. Recent data indicated that India’s gems and jewelry exports dropped by 23.49 percent in February, totaling USD 2,422.9 million. To address this decline, the Gem and Jewellery Export Promotion Council (GJEPC) participated in the Hong Kong International Diamond, Gem & Pearl Show earlier this month. The Indian Pavilion showcased various diamond products and aimed to strengthen trade ties. According to GJEPC officials, improving diamond prices and increasing demand from China could reshape India's diamond manufacturing landscape. They noted that buyers are becoming more accepting of current prices, which is leading to what seems to be a steady sales pattern. There is a growing trend for smaller diamonds among consumers, reflecting a shift in preferences. While the full recovery of the market is not yet realized, there is hope for growth with stabilizing prices and renewed demand. Emerging markets like Cambodia, Vietnam, and Brazil are beginning to show interest in larger stones, although they cannot replace China’s dominant position. Overall, the GJEPC believes that with the right strategies, India is well-positioned to adapt to these changes and drive sustainable growth in its diamond industry.