Crisil Ratings in its latest report has stated that recovery in key export markets and pent-up demand are likely to arrest the decline in revenue of the country's diamond industry to 20 per cent at $15 billion. It said that when the COVID-19 pandemic took hold, the industry was expected to see a third of its revenue shaved off this fiscal. However, this could now get arrested at around 20 per cent.
As per the report, the recent upsurge in spending on diamonds, riding on a combination of pent-up demand and recovery in retail offtake in key markets such as the US and China, is expected to help India's diamond industry contain its decline and close this fiscal with a revenue of over $15 billion. Sluggish demand and extended lockdowns globally saw exports plunge to $5.5 billion in the first half, almost half of the previous year's business.
However, exports in the third quarter ended December 2020 rose to an estimated monthly average of $1.6 billion, setting the industry up for a tryst with the $15-billion-mark for the full year. The report said that at the start of the financial year, the industry was grappling with significant build-up of inventory, comprising both rough and polished diamonds, over the previous seven months.