Double the pain for Surat diamond industry as demand falls, costs rise

Western markets fear recession and domestic business is uncertain ahead of festival season later this year

The diamond industry in Surat, Gujarat, is preparing for flat domestic and international demand as raw material prices rise and "recessionary trends" build in the west.

The industry has recorded a five per cent fall in demand as markets in Europe, the US, China and Hong Kong either retreat or stagnate. Diamond merchants are unsure of domestic demand picking up ahead of the festival season October to December, as local buyers are yet to confirm orders.

Rough diamond prices have increased by 10-15 per cent in the last one and half months amid a supply crunch due to US