India’s GJEPC Rules Out Import Freeze

India’s diamond sector will not call for a pause on rough imports despite the current market slump, instead focusing on promoting demand, the head of the country’s main trade organization said Thursday. 

Weak retail sales and rising inventories have piled pressure on Indian polished manufacturers, whose production cuts have not kept up with the drop in orders. 

During last year’s downturn, the Gem & Jewellery Export Promotion Council (GJEPC) and four other Indian industry bodies recommended a two-month voluntary moratorium on imports of rough diamonds from October 15 to December 15. This led to an easing of the supply-demand imbalance. 

Midstream trading improved in early 2024 as dealers needed goods to fill supply gaps, GJEPC chairman Vipul Shah explained in an interview with Rapaport News. However, that positive impact tapered off in the following months as manufacturers returned to rough buying and consumer demand was static. 

An “import freeze is not a solution. We have to plan for [the] long term,” said Shah, who is also the CEO of Mumbai-based diamond manufacturer Asian Star. 

The industry will “work towards marketing spend[ing] and promotion,” the executive added. This will include collaborating with the Natural Diamond Council (NDC) and the Indian government. 

In addition, manufacturers have already reduced their rough purchases, removing the need for industry groups to issue a recommendation to do so, he noted. 

Competition from synthetics and an ongoing slump in China’s appetite for diamonds drove the downturn. However, most Indian manufacturers maintain some polished production to avoid losing workers and to keep access to rough supply and credit lines. 

Still, the root cause is demand. The US market has been satisfactory, with the recent JCK Las Vegas show positive, Shah observed. Indian domestic sales have been a bright spot. However, reigniting demand in mainland China is essential, he pointed out. 

“Something has to be done as far as the Chinese market is concerned,” he said. 

Image: Rough diamonds. (Shutterstock)