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Global Trade Research Initiative (GTRI) has said that India's diamond sector is facing a severe crisis as both imports and exports have sharply declined in the past three years, which has triggered defaults, factory closures, and widespread job losses. It said that while export returns have surged, a large inventory of unprocessed rough diamonds is piling up due to reduced orders and growing competition from lab-grown diamonds.

GTRI Founder Ajay Srivastava said ‘This has triggered defaults, factory closures, and widespread job losses. Tragically, more than 60 people in Gujarat's diamond sector have committed suicide, reflecting the severe financial and emotional strain India's diamond sector is facing.’ He said that immediate action is essential to address these problems and safeguard the future of the sector.

According to the think tank data, a 24.5 per cent drop in rough diamond imports from $18.5 billion in 2021-22 to $14 billion in 2023-024 shows weaker global markets and fewer processing orders. After adjusting for re-exported rough diamonds, net imports declined by 25.3 per cent, from $17.5 billion to $13.1 billion, indicating reduced demand for processing in India. Exports of cut and polished diamonds fell by a higher margin of 34.6 per cent, from $24.4 billion in FY 2022 to $13.1 billion in FY 2024.

Additionally, the share of unsold diamonds returned to India increased from 35 per cent to 45.6 per cent during this period. It added the net exports of cut and polished diamonds dropped by 45.3 per cent, from $15.9 billion to $8.7 billion, reflecting a weak market and rising unsold inventory. The gap between net rough diamond imports and net cut and polished diamond exports widened significantly, from $1.6 billion in FY 2022 to $4.4 billion in FY2024, signalling a large inventory buildup and a lack of sufficient export orders. Moreover, it said that some challenges of the sector stem from regulatory issues and internal inefficiencies within the industry.