Fresh tensions between the US and China are adding to the anxieties of Indian diamond exporters who have reduced capacity utilisation of their cutting and polishing units by 40% due to a slowdown in global diamond sales over the last three months.
“We do not know how the geopolitical tension will pan out in the coming days. Both the US and China are important markets for us,” said Vipul Shah, chairman of Gem & Jewellery Export Promotion Council (GJEPC).
Tensions between the US and China flared in recent weeks with the US forces shooting down a suspected Chinese spy balloon off South Carolina coast and the two countries trading charges of running surveillance operations.
The US is the largest importer of diamonds from India while China is the second largest market of Indian cut and polished diamonds.
Shah said there is a slowdown in the offtake of cut and polished diamonds from India to the US.
Due to a slowdown in the export market, cutting and polishing units in Surat are now working at 60% capacity and the working days have been brought down to 4-5 days a week. Gross export of cut and polished diamonds from India stood at $1,270.36 million in December 2022, down 28.25% from $1,770.61 million in December 2021.