MUMBAI, July 11: Indian diamonds seem to be losing more and more of their glitter. The downward trend in diamond exports which started in 1996-97 continued during the first quarter of 1997-98 mainly due to the recessionary trend in the international market.

The continuing fall in exports was mainly due to the drop of over 34 per cent in exports to Japan. The total export of Rs 15,607 crore during 1995-96 had fallen to Rs 14,915 crore in 1996-97. It fell further to Rs 3,076 crore during the first quarter of 1997-98 from Rs 3,149 crore in the corresponding period of last year.

Praveen Shankar Pandya, chairman of the Gem & Jewellery Export Promotion Council (GJEPC) told The Indian Express that the current recessionary trend in diamond exports will continue during whole of the current year in view of the drop in Japanese buying. The country exports about 30 per cent of diamonds to the US and about 18 per cent to Japan. ``However, the US export market has picked up but other markets are not showing any signs of recovery,'' Pandya said.

The diamond export sector is one of the largest foreign exchange earners for the country. Along with the demand recession, the high interest rate level in India has added to the problems of Indian exporters.

However, jewellery exports are picking up. During 1996-97, the country exported jewellery worth Rs 2,631 crore against Rs 1,888 crore in 1995-96. During the first quarter of the current year, the country exported jewellery worth Rs 463 crore (provisional) compared to Rs 508 crore in corresponding period last year. But this figure will go up as and when more export details are available.

The GJEPC chairman said that ``as one of the world's fastest growing jewellery making centres, India is becoming an important destination on the itineraries of jewellery buyers worldwide.'' While there is a tremendous potential for Indian jewellery export to the international market due to the cheap labour cost and other competitive advantages, the Council has already prepared the groundwork for the same by organising and participating in international trade fairs.

The growth in jewllery export can nullify the decline in diamond exports. ``The country is now focussing on high value addition in diamond products. The average value addition to the diamond industry is 30%. India is concentrating on low value diamonds where the value addition is higher,'' he said and added India would have been a major jewellery exporter had the government not imposed the Gold Control Act.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.