India world’s number 3 market for diamonds

MUMBAI: India is not only the second largest gold-consuming country, it has also become one of the largest markets for diamonds. With an 8% share for polished diamonds, India is now the world’s third largest diamond consumer behind US (42%) and China (16%), the latest Diamond Insight report by global major De Beers showed.

The Indian appetite for diamonds has grown at a tremendous pace: In 10 years, the Indian market nearly trebled in size to about Rs 22,000 crore by end-2014, and around 25 lakh pieces of diamond jewellery were acquired by Indian women in 2013, roughly six times the number acquired in 2002, the report pointed out.

“India’s domestic diamond consumer market has achieved almost uninterrupted growth over the last two decades, with demand for diamond jewellery expanding in 19 of the last 20 years in rupee terms,” De Beers said. “The brief contraction in 2013, caused by the depreciating purchasing power of the rupee and a weakening of the broader Indian economy, reversed in 2014,” it said.

The report also pointed out that as income is growing, Indian consumers are increasingly buying diamonds, which is reflected in the increasing volumes of diamond jewellery sales.

De Beers said that global diamond jewellery sales grew 3% in 2014 to a record of over $80 billion, helped by strong demand in the US. It said sales of polished diamonds, in local currency terms, rose 7% in the US, while demand in China grew by 6% and in India by 3%.

The rising stature of the Indian consumers at the global stage also prompted De Beers to dedicate an entire section of its annual global report to India in which most of its inferences were based on a survey of 40,000 women around the country. The report pointed out that, unlike in many western markets, in India very few men propose with diamonds. “Instead (they) display their love with gifts of diamonds on different occasions during the marriage,” the report said.

In India, De Beers found that the decision to buy a diamond is normally through a consultative process in which women are the main decision makers, and hence its survey on women which was one of the largest ever of its kind in the country, it claimed.

“Over the last decade, India’s rising economic prospects have enabled more Indian women to act on their desire for diamonds. Indian consumer demand for diamonds has more than trebled over this period…yet this growth story is far from over. Rising incomes and aspirations could afford India’s diamond industry an even bigger prize over the next decade,” De Beers said.