Close to heart

New Delhi, May 10: Bulk buyers from the US and the European Union are increasingly buying Indian diamond studded jewellery.

The popularity of diamond jewellery has led retailers in the US like Walmart and JC Penny to consider sourcing their requirements directly from India.

A recent study carried out by rating agency Icra points out that the long-term outlook for Indian diamond and jewellery industry continues to be positive. Total cut and polished diamonds exported from India was 35.82 carats (million) in 2003, valued at $8,023 million.

The US market is witnessing a trend of increased imports from India. The study says that trends in the US market towards a decrease in average sizes also is expected to favour Indian exporters.

The study says that significant domestic and export opportunities for the Indian industry could also arise due to major promotional programmes launched by Diamond Trading Corporation (DTC) for leading diamond and jewellery makers and exporters to boost the marketing of their products at home and abroad.

Under the programme, which is known as supplier of choice, DTC takes marketing initiative, targeted at creating incremental demand for diamonds and jewellery through direct partnerships with sight holders and retailers.

In 2003, DTC raised its rough diamond prices on three occasions and, by the end of the year, its prices were on an average about 10 per cent higher than at the end of 2002. In January 2004, responding to the current strength of the diamond market and the positive outlook for the year, DTC raised its rough diamond prices by another 3 per cent.

The bulk of Indian gems and jewellery exports comprises import of rough diamonds, cutting and polishing in India and re-export.

Cut and polished diamonds accounted for 78 per cent of India’s gems and jewellery exports during financial year 2003, followed by gold jewellery (16.6 per cent), coloured gemstones (2.1 per cent) and non-gold jewellery (0.9 per cent).

The domestic diamond jewellery market is estimated at around $800 million per annum (in polished wholesale prices). The demand is dependent on the growth of gross domestic product (GDP), which has slowed down recently, but is expected to grow in the near future.