DIAMOND CUTTING COMPANIES

Unraveling the mystique of the Koh-i-noor diamond, linked to a fabled curse, the article explores its alleged connection to King Charles' cancer. From the diamond's origin in India to its journey through empires, the curse supposedly led to the downfall of rulers. While the British Royals avoided wearing it, demands persist for its return to India amidst ongoing fascination and superstition.

Budget: The interim Budget with strategic moves can give the Indian gold jewellery industry a boost. An infrastructure boost can ensure competitive prices for raw materials and availability of gold loans. Skill development and government support for machinery procurement will enhance manufacturing capabilities. Special financing can help Indian brands expand globally. Budgetary support for cost of capital and marketing will improve reach and attract international brands. These steps can make India a global hub for the gems and jewellery industry.

The industry, which contributes about 10% to the country's merchandise exports and employs nearly 5 million people, has seen a fall in exports recently, and this requires attention of the government.

Union budget 2024: The Gem and Jewellery Export Promotion Council (GJEPC) has called on the Indian government to lower import duties on gold and cut and polished diamonds ahead of the Union Budget. The GJEPC believes that increased import taxes on polished and cut gemstones would lead to lower exports and fewer jobs in the jewellery sector, losing its competitive advantage to rival nations like China and Thailand.

Union Budget: The Gem & Jewellery Export Promotion Council (GJEPC) has suggested the introduction of a Safe Harbour Rule for the sale of rough diamonds in Special Notified Zones (SNZs), as well as the implementation of a Diamond Imprest License and a reduction in import duty on cut & polished diamonds. These measures would allow India to become a trading hub like Dubai and Belgium, enabling Indian diamond manufacturers to access trading hubs without traveling abroad.

Kaustubh Pawaskar says: “We should expect some improvement in demand from Q1 of FY2025 since inflation has also reduced and companies are passing on the benefit to the consumers in forms of price cuts and grammage increase. The benefits should start coming in the quarters ahead and if all goes well, monsoons turn out to be better, then it should help in revival in the rural demand.”

A month ago, diamond prices had plunged by 35% due to excess supply amid weaker exports to the US which is facing recessionary pressures. Dinesh Lakhani, director (global business) of Kiran Gems, the largest diamond manufacturer in India, said, "The inventory has almost been liquidated. The supply-demand position has improved which has pushed up polished prices. The sales of diamonds in the US, though slow, is still moving."

Lower disposable income is affecting the demand for diamond jewellery in key consumer markets. De Beers expects the situation to improve once the broader macroeconomic environment stabilises.

The battle in West Asia in itself would not have worried India’s diamond cutting and polishing units. But it is a blow to an industry already hit by the Russia-Ukraine conflict and falling global demand.

“We see phenomenal growth, especially for companies like Goldiam because we service the mid-segment and the mid-market of the US which has been so starved of buying a solitary and large diamond jewellery that this fits perfectly both in budget as well as offering something that is just totally similar in terms of look.”

Saturday’s assault has sparked fresh concern about geopolitical risks among investors just when global financial markets were already grappling with the impact of high-interest rates and the slowdown in China’s economy. Oil surged more than 5% while US equity futures dropped in Asia trading, as the risk of the conflict escalating across the Middle East region remains acute.

The Indian diamond trade has decided to halt imports of rough diamonds from major mining companies for two months starting from October 15. This decision comes as the demand for cut and polished diamonds in the US and China has been slowing down. The move aims to reduce the industry's polished stock inventory, protect its financial health, and save jobs for approximately two million workers.

India's export of cut and polished diamonds is expected to decline by 22% to USD 17.2 billion in the current fiscal year, according to rating agency Icra. The decline is attributed to weakened demand from key consuming nations such as the US and Europe, as well as limited demand from China. Additionally, competition from lab-grown diamonds and elevated prices of rough diamonds have further impacted exports.

While the festive season may spur demand in some way in the upcoming months, exports are still expected to contract by 10% year-on-year presenting a grim outlook.

India has asked the U.S. to allow the release of $26 million belonging to at least two Indian diamond firms that was frozen due to their alleged trade links with sanctioned Russian diamond major Alrosa. The freeze is the first known punitive sanctions measure against any Indian business since Russia's full-scale invasion of Ukraine last year and subsequent Western sanctions on Russian entities.

The platform is cost-free for searching, browsing, and listing, fostering a user friendly experience for all stakeholders.

The most expensive teapot in the world has been revealed by the Guinness Book of World Records. The teapot was valued at $3m in 2016 and is made from 18-carat gold, covered in diamonds and features a ruby in the centre. It was made by Italian jeweller, Fulvio Scavia and is owned by the N Sethia Foundation in the UK.

The deal that the firm had cut with many wealthy individuals, including professionals, real estate players, and a few farmers in the region to raise money has backfired amid a fall in the price of labgrown diamonds. The outstanding dues would be in the region of Rs 500 crore, three persons in the diamond market told ET.

PE to buy IGI from Fosun, founders, small shareholders in a deal likely to be signed this weekend.

Major rough diamond auction houses in Belgium and Dubai have cancelled auctions as India's diamond industry is hit by a slump in demand for polished stones from China and the US. Indian companies process nine out of every 10 diamonds in the world. De Beers has also rescheduled its auctions and postponed planned viewings of its rough diamonds as beleaguered buyers wait for a market revival. The chairman of the Gem & Jewellery Export Promotion Council warned the fall in demand would hurt exports this quarter.

​​There were 54 corporate bankruptcy petitions in April, down from 70 in March, S&P Global said. Still, the year-to-date count more than doubled to 236 from a year ago. Consumer discretionary companies logged a higher number of bankruptcies than any other sector in 2023, according to S&P Global, with the once high-flying retailer Bed Bath & Beyond among the latest victims.

Indian cut and polished diamond exports are expected to decrease by 10-15% to $19-20 billion in FY24, following an 8-10% contraction in the previous year, due to a global recession, according to rating agency ICRA. Tighter liquidity and macroeconomic headwinds are impacting overall revenues, while a price differential between rough and polished diamonds is hurting operating profit margins.

Banks fix the overall export credit in rupees. However, with a depreciating currency eating into the quantum of loans sanctioned by local banks, diamond firms are left with less and less money for import of rough stones which are cut in India. More than 90% of the world's diamonds are cut and polished in India before the polished ones are shipped to world's leading markets like the US and China.