India's cut and polished diamond exports likely to hit five-year low in FY24, says CareEdge Ratings
CareEdge Ratings, a knowledge-based analytical group, whose parent company is Care Ratings.
CareEdge Ratings expects the demand in the near term to remain subdued and no significant recovery in the segment during FY25.
As per the report, in the medium term, CPD exports from India will be influenced by economic recovery in consumption markets, geopolitical landscape, and customer preference for diamond jewellery in the discretionary spending space. The entities with prudent debtors and inventory management are expected to sail the tough tide.
Yogesh Shah, Senior Director at CareEdge Ratings says, “Players operating in smaller carat diamonds (below 0.3 carats) to be better placed than entities dealing in certified diamonds, as smaller carat diamonds have witnessed lower price erosion and limited impact of LGD diamonds”.
India is the world’s largest centre for cutting and polishing diamonds, accounting for over 90 to 95% of the total world’s polished diamond consumption. The US and China, the primary diamond-consuming markets, together account for approximately 65% of India's diamond exports.
Following the pandemic, a surge in diamond jewellery demand, spurred by the US economic stimulus and limited opportunities for experiential spending, propelled CPD exports to record highs in FY22 ($24.43 bn) and FY23 ($22.04 bn). However, economic conditions in the US and China, the rise of alternative discretionary spending options, the growing market for Lab-grown Diamonds (LGD), and geopolitical tensions have negatively
