While the Indian diamond industry is set to launch its Christmas sales, slowdown of the US economy may upset the export targets of the jewellery and polished diamond exporters.

According to industry experts, the jewellery exporters from India are a bit cautious ahead of the Christmas season with wholesalers and retailers in the US going slow on the import of jewellery and polished diamonds.

India exports around 35% of jewellery and polished diamonds to the US. However, the slowdown in the US may upset the export targets of many small and big exporters from India.

Interestingly, the export figures available with the Gems and Jewellery Export Promotion Council (GJEPC) show that the exports of cut and polished diamond and jewellery from April-August have increased by 29% and 12% respectively. But the slowdown is likely to bring down the export figures by the end of this year.

For the jewellery wholesalers and retailers in the US, 2006 was the banner year as the sales soared to more than 7% compared to the previous year. However, 2007 does not look promising with the jewellery sales showing downward trend in the first quarter itself, according to a survey by a leading US firm.

Consumer confidence slid to its lowest point in almost a year as worries about job availability, high gasoline prices, and the severity of the housing slump weighed heavy on people’s minds.

Gasoline prices nationwide are now hovering around $2.98 a gallon, up a bit from $2.96 a gallon at the beginning of July. Prices had spiked past $3 a gallon in May. Another factor depressing consumer sentiment is whether the year-long housing slump will worsen and drag down home prices.

During the five-year housing boom, rising home values made people feel more wealthy. They borrowed against their homes and spent lavishly. Weaker home values — a byproduct of housing slump — have made some more cautious.

Industry observers are saying that most of the big players have already started looking for other markets like Europe, CIS countries, Japan and UAE.

Mr. Divya Aggarwal

Money Management Consultants Ltd

Senior Copy Editor, Money Management Consultants Ltd
New Delhi, India

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