SURAT (Commodity Online): Till last year, US was India’s biggest destination to export diamonds. With the recession setting in, demand for diamonds in US markets climbed down drastically.
This forced diamond polishing units in Surat to look for other destinations. This has resulted in Surat exporting more diamonds to United Arab Emirates (UAE) in 2008-09 than to the US.
Again, the demand for Made-in-India merchandise in the world’s largest economy continued to shrink — exports from India to the US dropped by 18.7% in the first six months of this financial year to $10.44 billion, compared with $12.84 billion in the same period last year.
Though Surat diamond units are trying to tap new markets like Latin America to keep export registers ringing, gaining a meaningful foothold is expected to take at least two years.
While the US was India’s biggest export destination until 2007-08, the emergence of oil-rich UAE as the biggest buyer of Indian goods is primarily because of a paradigm shift in the gems & jewellery business.
While the US withdrew benefits for Indian gems exporters under the Generalised System of Preferences regime last year, Dubai has emerged a major trading hub for diamonds polished in India. So, gems exports to the UAE more than doubled to over $10 billion in 2008-09, while exports to the US declined marginally to about $5 billion. Traditionally, the sector has had the highest share in India’s export basket to these two countries.
