Economic Recession? Diamond Jewelry demand in India is on the rise

A new study predicts that diamond jewelry in India will exceed $6 billion in 2010-2011. This number is nowhere close to sales in the US, but if one considers the present $4.2 billion sales, this increase rate is very impressive, implying that a significant increase is expected throughout future decades.

The rise in diamond jewelry demand is largely attributed to the rise of gold prices worldwide, making diamonds a suitable fancy alternative. The overall Indian jewelry market sales' are about $16 billion a year, including diamond and gold jewelry. In the last 4 years diamond jewelry sales have quadrupled from $1 to $4.2 billion, and as aforesaid, the prediction for the next year is an additional increase, with an ascending increase rate.

While the USA and the UK markets have only recently shown signs of slowly recovering from the economic crisis, the vitality of the Indian jewelry market is a very enlightening news for diamond traders. Thus far diamond jewelry constituted a relatively small percentage of total jewelry sales, so dealers believe there's still a large sale increase potential, which is expected to bear fruits in the near and distant future.

Several diamond jewelry manufacturing companies have reported an increase of about 20% between last year and 2009. Diamond jewelry is becoming more "in", replacing gold jewelry, which consumers adapt to its rising prices by neglecting it and treating it as much less fashionable. During the next Diwali (Hindu Festival of Light) month, in the 2009 autumn, diamond jewelry sales are supposed to reach a new peak.

A study conducted by KPMG predicts the India's total jewelry sales per year would exceed $20 billion by 2010 and exceed $35 by 2015, implying that the sky is its only limit. With the growing demand for diamond jewelry in China, as well as India, it is predicted that jewelry demand in these two populous Asian countries combined would reach that of the US. Though still considered a third world country, the upper and middle class in India is growing at high rates, expanding diamond jewelry potential market significantly. The 2008-2009 global economic crisis have shown effect almost in every local economy worldwide, though India, in a rather similar manner to China, has shown recovery signs earlier than western great nations. The production rates of many merchandise and products is rising prominently, which is much due to low workers' salaries and the enormous number of working hands.  

India is a dominant diamond producer, the supply chain is much shorter when diamond are destined to be sold in the Indian market, than in western countries, making the growing demand for diamond jewelry even more favorable in the eyes of both local diamond polishing companies and local dealers.