India’s diamond cutters, who polish 14 of every 15 of the world’s gems, are betting on the incoming administration of US president-elect Donald Trump to sustain the expansion of their biggest market in the US, even as Asian buying of luxury stones falters.
India expects to export 10 to 15 percent more polished diamonds to the US in the year beginning April, growth similar to that seen last year, on the belief that a Trump presidency will reinvigorate the world’s largest economy, said Praveen Shankar Pandya, chairman of the government-sponsored Gem & Jewellery Export Promotion Council.
“More jobs are being created in America and they would spend more money on jewelry. It is already a big market; it’s going to be bigger,” the third-generation diamond merchant, who has worked in the industry for 40 years, said in an interview this week at his office in the sprawling 8-hectare Bharat Diamond Bourse complex in Mumbai.
Photo: AFP
“From 2008, the market took a beating and now it is again going up,” he said.
In the eight months through November, India’s overseas sales rose 12 percent year-on-year to US$15.4 billion, he said, while rough diamond imports climbed almost a third over the period to satisfy the gains in export demand for the finished product. Some gems exported to Hong Kong, the gateway to China, are also routed to the US, making it India’s biggest market, Pandya said.
The jewelry group joins top diamond supplier De Beers in forecasting more jobs and higher spending from a Trump presidency that will benefit luxury goods. The recovery in the US, which accounts for almost half of global diamond demand, predates Trump. An improving economy through last year saw orders over Christmas double from the previous year, Pandya said.
The pivot westward comes as Chinese demand flattens along with its economic growth and India’s black money curbs in November tighten disposable income.
Indian sales “should come back only by the next marriage season after September,” Pandya said. “People would have found out the ways and means to do cashless transactions by then.”
Banks from ABN Amro Bank NV to Macquarie Group Ltd have forecast a brighter outlook for the US$80 billion diamond industry, with prices expected to be higher for both rough and polished diamonds. The price of uncut gems recovered last year from a drop to seven-year lows, and Macquarie predicts prices could start rising as much as 5 percent a year from the end of this year.
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