The US-China agreement of 'phase one' which took place on January 15 have raised hopes of the Indian diamond trade for an improved performance in Q4 of FY20. Speaking to top-notch industry insiders, Indian Jeweller exclusively brings you the pulse of the Indian diamond trade post the deal and how it would shape the future.
Cut and polished diamond exports in December 2019 declined by 3.92 per cent to Rs. 8926.58 crore from Rs 9290.78 crore in December 2018. Shedding light on how the deal will be beneficial for diamond export in India, Vipul Shah of Asian Star, said, "The current US-China deal has only bought them time until the elections. Nothing that is concrete and all the issues are still pending. Phase two deal is what I think will be more important and now we just have to wait and watch how the things are progressing between both the countries. Yes, the escalation of trade war has settled down for sometime."
"On the positive side, what I see is that China should start standing on its own feet. After the new year, demand should improve for our products which was slowed down. Only thing is that Hong Kong is still going on protest which will pose difficulty. Looking at the date, however, China should pick up from here is what I understand since they were on the brink of a trade war so the data is important for them which will help them for their internal growth as such and consumption. So if their consumption begins, that means it can help our industry," he said.
Exports of cut and polished diamond has fallen 17.14 per cent in the first 9 months of FY20 which the trade attributes to the trade war between US and China, the two key markets for Indian exporters. When we spoke to Vipul Sutaria of Dharmanandan Diamonds, for his take, he shared, "It is a positive sign, China has a little more margin to move their goods if everything works out then China will start growing positively. Chinese local consumption was down because everybody was cautious of the trade war, they worried about the crisis. The chinese market was not that great but now because of the relief of the trade deal they might come back to consumption so our export to China will increase."
After more than two years of rising tension, the US and China have signed a deal aimed at calming trade frictions. The agreement has been hard-fought, but it is unclear how much economic relief from their trade war it will offer.
