Developments in the Indian Diamond Industry

India has had a long love affair with diamonds throughout its history. In fact, the country is the biggest consumer in the world when it comes to rough diamonds.  For example, in 2010 and 2011, the nation's imports of diamonds rough were worth approximately $11 billion while the export of polished diamonds were priced at about $28 billion.

Unsettling Events in the Diamond Trade
However, recent news has been causing alarms in the Indian diamond market. According to figures released by the Kimberley Process Certification Scheme or KPCS, the international body of regulators, the production of uncut diamonds has fallen to 120 million carats in 2011 from 150 million carats back in 2007. This is a decrease of roughly 20 percent. Furthermore, the Diamond Trading Company or DTC is not anticipating these numbers to rise anytime soon in the next two years.
Uncertain Future Ahead
This could spell trouble for the world's largest polish and diamond cuts center in Surat, India. As companies all over the world struggle to replace old mining assets with new ones, production could continue to slow down. Current diamond prices have already been affected by these events. The rates charged for rough diamonds increased by 24 percent last year after seeing 32 percent gains for two consecutive years. With the rising demand for gems such as round shape diamond jewelry from emerging middle class markets in India and China, it is a strong possibility that prices will continue to rocket upwards.
Causes for Optimism
However, not all news spell gloom for India's diamond industry. Recently, the first ever women's only polishing and cutting factory for diamonds was opened in Ahmedabad by manufacturer K.P. Sanghvi. The facility is expected to employ over 100 female workers in the next months, which could result in a vital shot of rejuvenation for the business. In addition, Rio Tinto Diamonds, one of the most important diamond companies operating today, is actively collaborating with local producers on initiatives that would raise the standards of workplace safety and health in Gujarat.
What do you think the future has in store for the diamond industry in India? How do you think it will affect other markets around the world?