The Economic Times of India reports that according to an analysis, by the Credit Rating Information Services of India Ltd. (CRISIL), a subsidiary of the American Company S&P Global, India’s diamond exports for the fiscal year 2020/2021, could shrink by a fifth of the total of US$ 24 billion realized in the fiscal year 2019/2020, to US$ 19 billion by the end of the current financial year, due to the sluggishness in global demand, precipitated by the novel coronavirus outbreak and consequent lockdowns imposed by countries around the world.
The analysis points out that in the first nine months of the financial year 2019/2020, India’s total diamond exports by value decreased by 18%. About 40% of the diamond exports went to Hong Kong, the main destination for Indian diamonds, where over the past year or so the local markets had been dysfunctional, perhaps due to political crisis created by anti-Chinese demonstrations in Hong Kong. Since January 15, 2020 diamond exports to Hong Kong had almost come to a standstill due to the uncertain conditions created by the coronavirus pandemic.
As far as payments for consignments exported to Hong Kong were concerned, exporters received such payments on time. However, for sales that took place after October 2019, bulk of the payments have not yet been received, despite the fact that bills are typically discounted for three to four months.
The Gem & Jewelry Export Promotion Council of India in a statement issued recently attributes the severe decline in gem and jewelry exports from India to China and Hong Kong to the outbreak of the coronavirus pandemic, that led to the disruption of manufacturing activities in China and trading activities in Hong Kong, both of which have now almost come to a standstill. According to the GJEPC, exports to China and Hong Kong have declined by 45% in February this year, in comparison to February of year 2019, and projects that exports to the region may decline further, by 70% in March and 95% in April 2020, in comparison to the same months last year.