Strengthening the position of the US dollar against Indian rupee ensured the growth of polished exports from India, The Business Standard reports. In April, polished exports in value terms jumped by almost 44% to 99.65 billion rupees compared to exports of 69.1 billion rupees recorded for the same month last year.
"Export growth is observed against the backdrop of the strengthening of the American economy. In addition, the growth of the dollar against the rupee helps to obtain large profits from exports, "said one of the exporters of diamonds from Surat.
However, industry participants emphasize that strengthening the dollar's position against rupee helps exporters, while leading to a rise in the cost of imports of rough diamonds, thus reducing the profit margin of diamond producers.
In May, the Indian rupee rate against the US dollar fell by 4.9% to 56.55 rupees per dollar (the lowest value in the last 11 months).
Diamond market expert Praveen Nanavati notes that the weakening of the rupee is profitable only for exporters, while diamond cutters lose a share of profits. "As the dollar has grown, exports in value terms have increased dramatically, while the growth in exports has not been so noticeable."
The Indian Council for the Promotion of the Export of Gems and Jewelery (GJEPC) shows that in April polished exports amounted to 2.54 million carats, compared with 2.23 million carats, exported during the same period last year. Thus, the annual growth in exports was 13%.
In addition, the GJEPC data show a decline in the volume of polished exports since January 2013. It is reported that in January India exported 3.12 million carats of diamonds, in February - 2.8 million carats. Indian exports in March amounted to 4.55 million carats of diamonds.
While the Reserve Bank of India (RBI) expresses concern about the country's trade deficit, the GJEPC data show that the diamond industry has made a significant contribution to reducing this deficit by controlling imports and increasing exports.