Indian cut and polished diamonds (CPD) exports to further decline by 7 to 10 per cent on-year in the current fiscal year
After reporting a 20-year low in exports in the financial year 2025 (FY25), Icra expects the Indian cut and polished diamonds (CPD) exports to further decline by 7 to 10 per cent in the current fiscal year on a year-on-year (YoY) basis to about USD 12 billion.
This is largely attributable to pressure on demand in the United States (US), exacerbated by uncertainties surrounding the imposition of US tariffs. Icra has maintained its sector outlook at negative.
Led by worsened global macro-economic conditions and increasing competition from lab-grown diamonds (LGD) and fancy-coloured diamonds (FCD), CPD exports from India contracted by 17 per cent to USD 13 billion in FY25. The report noted that while the prices of rough diamonds declined by 8 per cent in FY25 as miners affected price cuts to boost demand, any considerable correction in rough prices in the near term is unlikely.
“Polished diamond prices dropped to an all-time low in H2FY25, as demand remained tepid, resulting in the polished diamond prices in FY2025 declining by 7 per cent YoY, after a 17 per cent YoY fall in FY2024. Q1 is generally a slow quarter for the industry, which, coupled with the evolving tariff situation, is expected to result in range-bound polished prices in H1FY26,” Icra emphasised in its report.
The report highlighted that the credit profile of Indian CPD players is likely to remain subdued in FY2026 amid reduced earnings and stretched working capital cycle. Going forward, inventory management will remain critical from the credit perspective. Icra expects the operating profit margin (OPM) for entities in its sample set of companies to decline further to around 3.6 to 3.7 per cent in FY26.
