Tumbling rupee smacks down India's rough diamond imports

Gold  |  2013-06-19 07:17:05   |   By

With the rupee sinking to record lows against the greenback, the small and medium diamond merchants in India have stopped taking delivery of rough diamond consignments

MUMBAI (Scrap Monster) :  With the rupee sinking to record lows against the greenback, the small and medium diamond merchants in India have stopped taking delivery of rough diamond consignments.

India’s diamond merchants who already are facing severe financial crunch owing to rising diamond prices are now pushed to the wall having to pay in terms of the much depreciated rupee. The consignments booked when rupee’s exchange rate was 55 per dollar also need to be paid at the current exchange rate which hovers around 59 against dollar. The loss is too big that some merchants are even willing to pay depreciation charges for the parked consignments rather than accepting the consignments at a higher rupee exchange rate.

According to latest statistics released by the Gems and Jewellery Export Promotion Council (GJEPC), the imports of rough diamonds surged by over 25% to reach $2 billion. Also the Indian imports of rough diamond during the first five months of the year rose 10% from $5 billion in 2012 to $5.5 billion this year.

The drop in rough diamond imports is likely to cause severe shortage of rough diamonds. With suspicions of rupee depreciating further, the Indian diamond industry is feared to go down a rocky road in the near term.