SURAT: Speculative buying and the rising China threat have shot up the import of rough diamonds from India. In fact, Indian diamantaires imported more roughs than Belgium in 2012.
Despite facing a difficult year, India imported nearly $15 billion worth of rough diamonds during the year, a 3.4% increase over the previous year.
Against this, Belgium's rough diamond import stood at $12 billion, according to the statistics provided by the Gems and Jewellery Export Promotion Council (GJEPC).
Industry sources said the demand for rough diamonds increased after October 2012 as the diamond manufacturers in Surat responded to the increased sales of polished diamonds.
Most manufacturers including big diamond companies took the advantage of low rough diamond prices and indulged in speculative buying, expecting the demand to further pick up in 2013.
While the volume of rough diamond imports increased by 16.5% to 150 million carats in 2012 compared to 2011, the December 2012 import doubled at 18.5 million carats with a stated value of $1.76 billion.
Diamantaires are also getting wary about China, which has aggressively started acquiring roughs and actively negotiating with African governments to ship them directly to their country.
Rough purchases are typically part of a larger package of mineral rights acquired, in lieu of infrastructure facilities provided to that country.
"China is aggressively making inroads in the African nations to acquire rough. Around 60% of the rough diamonds come from the African nations. However, Indian diamantaires are making serious efforts to develop relations with African nations. If China corners the rough diamonds from African nations, then India will have to depend on Chinese traders for rough supplies, which we don't want," said Rakesh Patel, a rough diamond dealer.
Dinesh Navadia, president, Surat Diamond Association (SDA) said, "More rough diamonds imported into the country means more work for the diamond workers. Even the demand for polished diamonds is increasing in US, China, Hong Kong, UAE and Russia."