India's Diamond Market Receives Firm Orders as Rough Diamond Supply Crunch Eased

India supplies 90 percent of the global demand for polished diamonds. However, the disruption to the supply of rough diamonds caused by Western sanctions against Russia's mining giant Alrosa led to the closure of several units engaged in cutting and polishing in May and June of this year.

Indian diamond traders have received firm orders from international buyers until Christmas this year, several traders have told Sputnik.

The traders acknowledged that the supply crunch of rough diamonds from Russia has faded, with all issues, including payment and logistics, settled.

"Traders have received strong orders of cut and polish and finished diamond jewelry for Diwali (the festival of lights) and Christmas. The market is very positive right now. We are not facing any issue with the supply of rough diamonds now," Dinesh Navadiya, Gujarat regional chairman of the Gems and Jewellery Export Promotion Council, told Sputnik.

In July, the ratings agency Crisil forecast a dip of about 15-20 percent in revenues to the tune of $19-20 billion in the current financial year compared to the last fiscal for the diamond industry, owing to a surge in prices of rough diamonds due to supply disruption.

Western sanctions against Russia's mining giant Alrosa, which accounts for 30 percent of all global diamond supply, curbed the flow of rough diamonds in the international market.

Another Delhi-based trader, who wished to remain anonymous, said that the supply of rough diamonds stabilized after sorting out issues related to logistics and settlement payments for import transactions.

"Most of the settlement of import transactions are being done in currencies other than US dollars. However, we have yet to begin trading in rupees," the Delhi-based trader told Sputnik.

The Zimnisky Global Rough Diamond Price Index suggests the price is around seven percent down from the peak in February this year, prompting buyers in Europe and the US to place orders with Indian exporters.

Crisil in July said the prices of roughs had increased by almost 30 percent since April, with key buyers in the US and EU insisting on certificates of origin.

Trading and government sources said that most of the raw diamond imports are being routed through the UAE, the largest and fastest-growing diamond hub. The Dubai exchange's gross diamond trade (rough and polished) increased to $19.8 billion in the first half of this year.