Russia-Ukraine war may lead to shortage of diamonds in coming festive season

Import of gold in India surged in the month of May on strong demand from weddings and Akshaya Tritiya.

India imported 101 tonnes of gold in May 2022 compared to 13 tonnes in same month last year. The buying was also aided by fall in prices with gold touching low of Rs 49,572 per 10 gram in May.

However June imports are expected to decline as prices have rebound and are currently trading around Rs 51,000 per 10 gram.

In an interview to CNBC-TV18, Colin Shah, Chairman of Gem and Jewellery Export Promotion Council (GJEPC) said there may be shortage of diamonds and job losses if Russia-Ukraine war continues for a prolonged period.

“The big concern right now for the jewellery industry is the Russia-Ukraine war. Due to the sanctions imposed on Russia, 30-35 percent of rough diamonds which come from the Russian side have not come to India. So that is leading to some amount of unemployment in Surat region. So that is a big worry for the industry right now. Also if the war situation continues for a prolonged period, we may have shortage of diamonds in coming festive season. So those are two worries for the industry right now.”

He said jewellery exports to Amercia, Gulf, Europe continue to be strong but China with its massive lockdown has been a dampener.

“On the export front America still continues to be strong inspite of having high inflation numbers. The Gulf region exports are doing well, Europe is doing well. However the worrisome region for the jewellery exports is China. They have had massive lockdown and many parts of the country still haven’t opened up. So the worrisome part is China.”