There has been a recent increase in the local consumption of diamonds in India. Based on a report by the Economic Times of India, the domestic consumption of diamonds has doubled over the past three months. Diamonds are also bought for investment purposes, a trend which is new to India where gold was usually bought for investment purposes.
The increase in demand was from 2% to 4% of the total production of processed diamonds. This rise is significant even though the percentage of the total production is small, because India processes over 90% of the worlds diamonds, a Rs 80,000 Crore. According to Praveen Nanavati , the past president of Surat Diamonds Association the increase is on the rise.
Polished diamond prices have gone down by 15% due to the recession. However the diamond industry is gradually recovering and is expected to improve in the coming months.
The high gold prices is also one of the reasons why locals are buying diamonds as investment.
According to the Gem and Jewellery Export Promotion Council (GJEPC), there has been a 25% increase in the demand for diamond jewellery over the past 3 years.