The diamond hub in Surat is losing its glitter as American interest rates rise, reports CNBC-TV18.
Exports have declined from 15% To 6%. Surat's diamond hub has always sparkled. Since 2000 India's diamond exports have been growing at more than 15% a year. Recently that sparkle has been dimming. Last year exports grew just 6%.
President-Elect, S Guj CCI, Pravinbhai said, "Though the exports have been Rs 70,000 crore last year and has grown by 6%, we feel that with global economic growth slowing down, the exports would go down."
Americans are investing in markets and real estate, not in diamonds. The US, India's biggest diamond customer, has a few problems of its own. Americans are worried about rising interest rates and increasing fuel prices. These leave them with less money to spend on diamonds.
On the other hand, a rising stock market offers them an attractive investment proposition. So the money that they would have spent on diamonds now gets diverted to the market or real estate.
Proprietor, Sanghvi Diamonds, Chandrakant Sanghvi, said, "The profit margin in land and stock markets was higher and the profit margin in the diamond business has been going down over time. So many people invested in it."
Back in Surat the situation is hardly rosy. Land prices and stock prices are crashing. Beyond the bustle of everyday life, there is gloom. Some traders are believed to have even committed suicide. The diamond hub is losing its sparkle and traders hope that Diwali will bring back the glitter.
Americans are investing in markets and real estate, not in diamonds. The US, India's biggest diamond customer, has a few problems of its own. Americans are worried about rising interest rates and increasing fuel prices. These leave them with less money to spend on diamonds. 
