13:29 GMT13 August 2020
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    Futures trading is expected to provide crucial price hedge to thousands of Indian diamond traders. India is the largest producer of cut and polished diamonds in the world and this sector provides employment to millions.

    New Delhi (Sputnik) — Adding a new leaf to its commodity market, Indian Commodity Exchange Limited (ICEX), a screen-based online derivatives exchange for commodities, has started a futures exchange for diamond trading.

    "ICEX shall offer a fair, transparent and nationwide market, bringing in large market participation into the diamond trade. It shall result in efficient price discovery and provide an effective hedging platform for all stakeholders of the diamond industry," Sanjit Prasad, MD & CEO of ICEX, said at the exchange's inauguration in Mumbai.

    Investors can trade in the size of one carat and must take delivery of the booked contract. This will create an entirely new market for the diamond industry where the sellers can deliver their certified quality diamonds to a different set of buyers from across the country.

    "The vision behind ICEX has been to establish a world-class platform that offers de-risking avenues against the price vagaries in not only the Indian manufacturing sector but also in the agricultural sector," Ashok Sinha, the Chairman of ICEX, said at the inauguration in Mumbai.

    In March of this year, Indian Prime Minister Narendra Modi asked diamond traders to move beyond the cutting-polishing market and engage new avenues to boost the size of the Indian diamond industry from its current $40 billion. Government figures claim that 14 out of 15 diamonds set in jewelry around the world are processed in India. However, global economic slowdown and the government's decision to demonetize high-value currency notes last November have adversely impacted diamond traders, causing thousands of industry workers to lose their livelihoods.

    India's exports of polished diamonds in July were $1.65 billion, a slight decline of 0.3 percent for the year's average, according to the figures released by the Gem & Jewellery Export Promotion Council (GJEPC). The GJEPC said that imports of rough diamonds decreased by 6.1 percent in July to $1.33 billion.


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