India's natural diamond polishing industry is set to see a decline in revenue to a decadal low close to $12 billion during the current fiscal, according to Crisil Ratings.
The research firm attributed the decline in revenue to three reasons -
Diminished demand in key export markets of the US and China,
Fall in prices due to oversupply.
Shifts in consumer preference towards lab-grown diamonds due to affordability and high resemblance to the natural ones.
Crisil indicated that revenues in the natural diamond polishing industry will decrease for the third consecutive fiscal. With a sluggish demand and falling prices creating a buyers' market, polishers are restricting their purchases of rough diamonds.
Also, miners have cut production helping in the arrest of fall in prices of rough diamonds, the firm said.
According to Crisil Ratings, sluggish demand in the US market caused a fall in India's diamond exports, while there is a growing preference for golden jewellery in China as the yellow metal is now being considered as a safer asset providing better returns amid economic uncertainty.
In addition to this, the youth population in these key export markets is increasingly embracing lab-grown diamonds as limited disposable incomes are constraining discretionary spending, the research firm said.
(With Inputs From PTI.)
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