Product Profile: Diamonds

HS Code: 710239 Diamonds, worked, but not mounted or set (excluding industrial diamonds)

• India is the leader in the global processed diamond industry, accounting for over 90% of polished diamond manufacturing globally.
India, US and Hong Kong together account for over 50% of global diamond trade.
• Surat in Gujarat is well known as the hub for diamond polishing globally and around 85% of polished diamonds are exported.
• The industry is suffering from a liquidity crunch, due to which around 100,000 people lost their livelihoods since December 2018. Government also needs to address the opportunities emerging from US-China trade war. 


Diamonds are the hardest minerals known on earth and are highly valued for their shine and beauty. The diamond industry consists of various segments that mine, process (polishing and cutting) and market diamonds. The product under consideration is the worked diamond generally used in the gems & jewellery industry (excluding industrial diamonds).

Due to their high value, diamonds have also been sought by investors in addition to their use in the jewellery industry. The increase in overall purchasing power, especially of women, and the increase in wealth have been the main drivers behind the increasing demand for diamonds for jewellery and investment purposes.

Major diamonds reserves are found in the Canada, the Democratic Republic of the Congo, Australia, Botswana and Russia. Among these regions, Russia is in the lead with around 650 million carats of reserves at present. Global production of diamonds was recorded at 151 million carats in 2017 and 147 million carats in 2018. The global value of polished diamonds was estimated at US$ 25 billion in 2017.

India is the leader in the processed diamond segment. In 2017, India accounted for more than 90% of global polished diamond manufacturing by value and it holds a dominant position in all segments of the polished diamond industry. The US is the largest market for polished diamonds and its share in global demand grew from 40% in 2013 to 48% in 2017.

The Global Diamond Industry 2018 report by Bain and Co., points to three key trends that would shape the diamond industry in future. Constant improvements in digital technology are adding to the efficiency of all segments in the industry. Further, the emergence of lab-grown diamonds will be key in shaping the future of the industry, conditional on factors like consumer preferences and technological developments. Lastly, the changing preference of millennials under the influence of social media is likely to guide the marketing approach of the industry going forward.

Trade in diamonds

The major exporters of the polished diamonds are India, followed by the US, Hong Kong and Israel. Table 1 shows the export value, export share and untapped potential for the top 10 exporters that account for 94% of the total exports. India’s global exports of diamond stood at US$ 24.24 billion for the year.

Further, table 2 shows major importers of diamonds where US, Hong Kong and India are in the lead. In fact, the three countries account for more than 50% of global trade of polished diamonds.

Table 1: Top exporters of diamonds

Value exported in 2018 (US$ billion) Estimation of untapped potential trade, US$ billion Share in world exports
World 88.20   100.0%
India  24.24 26.97 27.5%
United States of America  19.48 0.46 22.1%
Hong Kong, China  13.56 0.08 15.4%
Israel 11.97 9.32 13.6%
Belgium 4.23 1.50 4.8%
United Arab Emirates 3.93 1.98 4.5%
Switzerland 1.99 0.33 2.3%
Thailand 1.57 1.44 1.8%
China 1.48 2.72 1.7%
Botswana 0.85 0.22 1.0%

Source: ITC Trade Map

Table 2: Top Importers of Diamond

Importers Value imported in 2018 (US$ billion) Share in world imports (%) Average tariff (estimated) applied by the country (%)
World 83.94 100
United States of America  23.80 28.4 0.1
Hong Kong, China  18.89 22.5 0
India  9.83 11.7 8
China 8.14 9.7 6
United Arab Emirates 4.21 5 4.5
Belgium 3.89 4.6 0
Israel 3.37 4 0
Switzerland 2.50 3 0
Thailand 1.84 2.2 0
United Kingdom 1.21 1.4 0

Source: ITC Trade Map

Hong Kong and US have been the largest export destinations of India for polished diamonds. In the year 2018, 40% of India’s global exports of diamond went to Hong Kong while 34.5% went to the US. On the other hand India imports around US$ 9 billion worth of diamonds, mainly from USA and Hong Kong. Thus, India is the net exporter of polished diamonds while USA and China are net importers. The trade balance situation of major countries dealing in the polished diamonds is indicated in figure 1.

Table 3: India’s important export destinations

Country Value imported in 2018 (US$ billion) % share in India’s exports Tariff rate Unit Value per unit
World 24.24 100.00%   803
Hong Kong, China 9.72 40.10% 0% 658
United States of America 8.38 34.56% 0% 1,479
Belgium 1.75 7.23% 0% 836
United Arab Emirates 1.05 4.31% 5% 424
Israel 0.98 4.04% 0% 1,334
Thailand 0.56 2.31% 0% 416
Japan 0.36 1.48% 0% 426
China 0.24 0.97% 0% 977
Switzerland 0.22 0.90% 0% 853
Australia 0.16 0.67% 0% 1,621

Source: ITC Trade Map

Table 4: India’s import partners

Value imported in 2018 (US$ billion) Share in India’s imports (%) Unit value (US$/unit) Average tariff (estimated) applied by India (%)
World 9.83 100 1219
United States of America 4.20 42.7 1781 10
Area Nes 2.27 23.1 2084
Hong Kong, China 2.17 22.1 724 10
Belgium 0.36 3.6 984 10
United Arab Emirates 0.26 2.6 312 10
Thailand 0.14 1.4 1657 0
Japan 0.12 1.3 2180 2.7
Israel 0.09 1 1099 10
Botswana 0.07 0.7 4037 10
Switzerland 0.06 0.6 1131 10

Source: ITC Trade Map

Source: ITC Trade Map

Indian diamond industry

The diamond polishing industry in India is concentrated in the western part of the country, specifically the cities of Surat, Jaipur and Mumbai. This is a US$ 23 billion industry with around 6,500 manufacturers. Over the years, India’s USP has been its low cost labour as well as easy and quick adaption of the latest technology.

Surat is the hub for cutting, polishing and processing rough diamonds and 85% of the diamonds are exported. However, following the recent infamous Nirav Modi Scam, the industry is concerned abnout losing access to cheap credit or demand for higher value collateral from banks as a precautionary measure. This liquidity crunch along with high price of rough diamonds has hit the industry hard with over 100,000 people losing work since Dec 2018.

Also, lab grown diamonds are also making inroads in the industry due to their low prices. India is taking the lead in the polishing segment for these lab-grown diamonds. It is worth noting that the US will impose 10% tariff on diamonds from China, which gives Indians an opportunity to exploit and enhance exports to the US even more, as India’s diamond exports have been sliding down in recent months.

In order to maintain the luster of Indian diamonds in the global market, it is necessary to support the industry by pulling it out of the liquidity crunch and assisting the market participants in tapping the potential from US-China trade war.

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1 year ago

Thank you for sharing the great information. it was a very clearly explained article. and briefly explained diamonds’ information.

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