Similarly, natural diamonds have also seen a significant price decline of 25-30%. According to The Times of India, several factors, including rising gold prices, a downturn in the US economy, and shifting buying patterns in China, have negatively impacted the diamond industry.

This downturn has had a profound effect on the diamond industry in Surat, a major hub for diamond processing and employment. “From 38,000 workers employed in Surat to small and medium businesses and large enterprises, everyone has been hit,” said Ashok Gajera, Chairman and Managing Director of Laxmi Diamonds, in an interview with ToI.

The devaluation of diamond stocks is forcing businesses to fulfill orders at a loss. Gajera noted, “Diamond rates have been falling for the past 22 months.”

In early 2023, there was a glimmer of hope as rough diamond imports to India increased, suggesting a potential recovery. However, this optimism was short-lived as the market now grapples with an oversupply issue.

Additionally, the demand for flawed natural diamonds has diminished due to fierce competition from flawless lab-grown diamonds. “China, which used to be a large buyer of flawless mined stones, is suddenly not interested and its purchasing power is merely 10-15% of what it was,” explained Gajera.

Data from the Indian gems and jewellery sector indicates a decline in overall gross exports of gems and jewellery, amounting to $4,691.6 million (Rs 39,123 crore) during April-May, reflecting a 5.9% decrease from the previous year. Notably, exports in the cut and polished diamonds sector fell by 15.5% to $2,627 million. Similarly, the provisional gross export of polished lab-grown diamonds dropped by 15.5% to $204.2 million from $241.6 million in the same period last year.