It has been known that China is a major market for Indian diamonds, accounting for 30% of India’s diamond exports. Until recently, when the China Lockdown and Beijing's zero-COVID policies became game changers.
The USA is the largest importer of Indian jewelry, with imports in 2021–22 valued at US$ 14.5 billion, up from US$ 8.7 billion in exports in 2020–21. The top five importers of Indian gems and jewelry in 2021 are the USA, China, the United Arab Emirates, Belgium, and Thailand.
However, exports declined by 13.45% from the previous year to $1,933.32 million in July, as demand from China, India's second-largest consumer of cut and polished diamonds after the United States, was low.
Last Tuesday, the Chinese Government ordered the lockdown of millions of residents after various districts near Beijing reported an increase in COVID-19 cases. Despite the country's economic difficulties, it enforced the lockdown.
Contribution of the UAE-India free trade agreement
Fortunately, on the other hand, it turns out that India's exports of plain gold and diamond jewelry to the UAE jumped last May and June after the UAE exempted imports from India from customs duties. The UAE and India signed a broad trade and investment agreement to increase annual trade between the two countries to $100 billion within five years.
The Gem and Jewelry Export Promotion Council said that India's exports of plain gold jewelry to the UAE in May jumped 72% from last year to 10.48 billion rupees ($131.16 million), while exports in June jumped 69% to 145.2 billion rupees.
The implementation of the agreement, known as the Comprehensive Economic Partnership Agreement, began on May 1 to revive India's exports of diamonds and gold jewelry to the UAE after customs exemption.
“Jewelry exports have been the direct beneficiary of the India-UAE Comprehensive Economic Partnership Agreement,” said Colin Shah, The previous chairman of the Gem, and Jewelry Export Promotion Council.
The Gem & Jewelry Export Promotion Council said in a statement that India's exports of precious stones and jewelry to the UAE jumped in June to $3.24 billion from $2.83 billion a year earlier, coinciding with the recent lockdown of millions of residents after various districts near Beijing reported an increase in COVID-19 cases.
The Middle East is still the most important market for India’s jewelry
To add further, this year, the Jewelry & Gem World event has been moved from Hong Kong to Singapore as there are very low COVID regulations for travelers in Singapore.
The event is scheduled to take place this September, and all foreign buyers are expected to attend. Singapore is now more accessible to international buyers and exhibitors than Hong Kong.
While cut and polished diamond shipments declined from India to China, Vipul Shah added in this regard: “We are optimistic that the meeting in Singapore will increase diamond exports." Given that plain gold and studded jewelry exports grew by 6.54% to $740.04 million in July, the Middle East is still the most important market for India’s gold and studded jewelry.
The latest facts about diamond shipping in the UAE (August 2022)
- According to Volza's India diamond export data, the United Arab Emirates had the largest share with 438,939 exports.
- Diamond import shipments in the United Arab Emirates totaled 441.8K, with 2,301 buyers.
- The top three product categories of diamond imports in the UAE are:
- HSN Code 71023910. HS: Diamond cut or otherwise worked but not mounted or set.
- HSN Code 71049100: 71049100. HS: Diamonds, synthetic, and reconstructed.
- HSN Code 71049010: 71049010. HS: Laboratory Created, Laboratory Grown, Manmade, Cultured, or Synthetic Diamonds.
- The majority of diamonds in the UAE are still imported from India.
- The United Arab Emirates is the biggest import market for diamonds in the MENA region.
Sources:
The Economic times - China's zero-Covid policy hits India's diamond exports - news
Reuters - China challenges India's polished diamond throne
Volza - United Arab Emirates Diamond import data
Vision - India... Exports of gold jewelry to the Emirates recover after customs exemption
