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The revenue of India's natural diamond polishing industry is expected to decline by 25-27 percent in the current financial year 2024-25. According to the report, this decline is much higher than in previous years.
Major Reasons
The main reason for the decline in diamond industry earnings is the lack of demand in major markets such as the US and China. Consumers are now preferring laboratory-grown diamonds.
Performance of previous years
In the last financial year, the revenue of this industry declined by 29 percent. Earlier, there was also a decline of 9 percent in the financial year 2022-23. This is the third consecutive year when the revenue is declining.
price drop
The report states that the prices of diamonds have fallen by 10-15 percent. Due to a lack of demand and excess supply, diamond polishers have limited the purchase of raw diamonds. This has affected production.
Miners reduced production
Diamond miners have also cut down their production. This has helped keep the prices of raw and polished diamonds stable.
Operational Margin
The industry's operating margin is expected to remain stable at 4.5-4.7 percent this fiscal. This shows that the industry is facing difficulties, but the situation has not deteriorated completely.
Increasing demand for gold in China
The demand for gold jewelry is increasing in China. Due to the economic situation there, people are looking at gold as a safe investment. It accounts for 28 percent of India's exports.
It is worth noting that the diamond industry is facing many challenges. Its revenue is being affected due to the decrease in demand and falling prices. Consumers prefer lab-made diamonds, which is further affecting the sale of natural diamonds. In this situation, the industry needs to improve.
