NEW DELHI: India’s diamond cutters, who polish 14 of every 15 of the world’s gems, are betting on Donald Trump to sustain the expansion of their biggest market in the U.S., even as Asian buying of luxury stones falters. India expects to export 10 percent to 15 percent more polished diamonds to the U.S. in the year beginning April, growth similar to that seen in 2016, on the belief that a Trump presidency will reinvigorate the world’s largest economy, according to Praveen Shankar Pandya, chairman of the government-sponsored Gem & Jewellery Export Promotion Council. “More jobs are being created in America and they would spend more money on jewelry. It is already a big market, it’s going to be bigger,” the third-generation diamond merchant, who has worked in the industry for 40 years, said in an interview this week at his office in the sprawling 20-acre Bharat Diamond Bourse complex in Mumbai. “From 2008, the market took a beating and now it is again going up,” he said.
In the eight months through November, India’s overseas sales rose 12 percent year-on-year to $15.4 billion, he said, while rough diamond imports climbed almost a third over the period to satisfy the gains in export demand for the finished product. Some gems exported to Hong Kong, the gateway to China, are also routed to the U.S., making it India’s biggest market, said Pandya. The jewelry group joins top diamond supplier De Beers in forecasting more jobs and higher spending from a Trump presidency that will benefit luxury goods. The recovery in the U.S. , which accounts for almost half of global diamond demand, predates Trump. An improving economy through 2016 saw orders over Christmas double from year ago levels, said Pandya. The pivot westward comes as Chinese demand flattens along with its economic growth and India’s black money curbs in November tighten disposable income. Indian sales “should come back only by the next marriage season after September,” Pandya said. “People would have found out the ways and means to do cashless transactions by then.”
Demand for luxury goods in China has slowed as a result of the country’s anti-corruption campaign and a weak yuan that has made imports more expensive, said Vipul Shah, managing director of Asian Star Co. Ltd., which sells to stores like Macy’s Inc. and Fred Meyer Jewelers Inc. in the U.S. “The focus is moving from east to west as the only center that is really promising for the industry right now is the U.S.,” he said by phone from Mumbai. “But the GDP growth ratio from China and India is looking pretty good. So once the volatility is settled, things will start improving maybe from next year.” Banks from ABN Amro Bank NV to Macquarie Group Ltd. have forecast a brighter outlook for the $80 billion diamond industry, with prices expected to be higher for both rough and polished diamonds. The price of uncut gems recovered last year from a drop to seven-year lows, and Macquarie predicts prices could start rising as much as 5 percent a year from the end of 2017.