Sources point out that earlier there have been conflicting reports on the subject. The response to the Las Vegas show is generally considered an indicator of the subsequent Christmas sales. Preliminary reports in this regard said that "the public response to it was very encouraging." Subsequent reports, however, stated that "there were more visitors than actual buyers".

Trade sources point out that it has Vegas business was encouraging one can normally expect buoyant sales during the subsequent Christmas season as well, going by the past experience. In that event the industry and trade can expect fresh enquiries and good business in the first quarter of the next year. If on the other hand, Christmas sales areweak, or only modestly better, that may imply that the industry and trade can be in for a difficult year.

In view of economic slowed-down in Japan, the second largest consumer in the world of diamond jewellery and virtual paralysis on some Asian markets most Indian exporters as well as their sister concerns abroad, have been concentrating their attention on the US market. Likewise other manufacturing centres have been focussing their attention to the same market, offering their goods even on memo basis. Being aware of this fierce competition among suppliers the US buyers have been bargaining hard and stipulating their credit terms. In most case shipments are made on 160-180 day credit basis.

If, therefore, Christmas sales in the USA are not as encouraging as earlier expected, payments for despatches already made may be delayed and can be even in jeopardy looking to some pre-Christmas business defaults. Goods can also be returned unsold.

Though the USA has its own diamond cutting industry, its ownproduction of cut and polished diamonds is comparatively small is confined to larger stones of over 0.5 carat per piece, mostly one cart or more per piece in-as-much as labour costs in the USA are the highest and it can, therefore, process economically only larger stones where the labour cost incidence can be modest.

India's overall exports of cut and polished diamonds from India to all destinations were of the order of $4.66 billion in 1995-96, 4.24 billion in 1996-97 and 4.49 billion in 1997-98. Out of this, exports to the USA amounted to $1.36 billion, 1.36 billion and 1.64 billion respectively in these years. Thus in 1997-98, nearly 37 per cent of our exports of cut and polished diamonds were to the USA. Moreover, the US importers absorb a lot of inexpensive and modestly priced diamonds in which India specialises. The Indian industry has suffered considerably in 1998 on account of some recent bankruptcies abroad, erosion of profitability and stock losses.

This is why also their hopes are pinned onthe US market which remains more active compared with other destinations. As enquiries from other markets are already slack the industry has considerably reduced its production. Even so, it is believed to be having substantial stocks of polished goods.