The diamond industry is vital to the Indian economy. India is one of the largest diamond processors in the world and the sector is highly export-oriented. Demand has increased due to socioeconomic factors like rising incomes and changing lifestyles. Supply is dependent on De Beers and new mining opportunities but also faces challenges like political instability and artificial scarcity. The market has some oligopolistic characteristics with a few large players controlling much of it.

1. DIAMOND INDUSTRY

2. Overview
• Diamond sector is vital to the Indian
economy.
• India is one of largest diamond processor
in the world.
• The diamond sector in India is highly
export-oriented.

3. Market Size and Structure
• India’s Diamond Sources
• Gems and Jewellery Cluster

4. Demand Side Factors:
 Socio Economic Factor
 Large Target population/increasing young
population
 Rising income level/disposable income of middle
class
 Changing life style/family structure

5. continue
 Black money spending
 Credit purchase
 Increase in nominal money supply
 Increase in nominal money supply
 Synthetic diamond

6. Behaviour of demand of diamond

7. Supply Side Factor
 De beers monopoly
 New mining opportunities:
 Political instability
 Shortage of high quality of raw diamond
 Artificial scarcity
 Export oriented industry

8. Suppliers Behavior

9. Elasticity Of Demand
 Price Elasticity :
•Not considered as an investment among Indians
because of less resale value.
• Most of the production is exported to different
countries.
• Purchased mostly as jewellery.
• In Indian market low quality diamonds are traded.

10. Price elasticity

11.  Income Elasticity:
• The income of Indian middle class has increased to a very large extent
which is really contributing to the demand of diamond. Especially the
newly married young couple and DINK families are emerging as the
largest consumer. The companies are also focusing on youth section of
society. Hence demand of diamond is showing elastic behaviour to the
increasing income.

12.  Cross Elasticity :
• As diamond have certain peculiar properties like hardness, shine, shape
environmental resistance, etc which is not present in other gems and
element so there is not any close substitute of diamond. So, there is neglible
impact of the price of gold or other gems on the demand of diamond.

13. Elasticity Of Supply :
 Price Elasticity:
• Large share of Market is dependent on De beers.
• The diamond manufactures have sufficiently long time to respond to
change in price, hence its supply is highly elastic.

14.  Income Elasticity:
• The supply is highly dependant on the income of manufacturers. After
the great recession of 2008 the export of diamond was highly affected
due to decrease in demand of US and European market. They were
not able to sell their finished diamond at adequate price. Hence, their
income got depleted. Hence, they were not able to supply even in
Indian market.

15.  Cross Elasticity
Rarely seen in case of diamond. More
than 90% of the diamonds processed in
India are used for export.

16. Cost structure
• Rough diamond
• Tools and machinery
• Labour

17. Market structure
• The Indian diamond market is oligopolistic in
nature. Most of the market is controlled by
few players like Nakshatra, Gitanjali
groups, D’damas, Venus Jewels, Hare Krishna
Exports, Ram Krishna Exports and Karp Impex.
• Instead of short run profit, they are focusing
on long run profit through slow saturation of
market.

18. Market structure
• Very less knowledge of the grades, price, cost
and qualities of diamond.
• The firms are interdependent on each other in
terms of pricing, marketing and supply
activities.

19. Pricing strategies
• Price discrimination
• Premium pricing

20. CONCLUSION
• India was the first country to dictate the world
about the shine of diamond. In the middle
India lost control over it, but again India have
captured the diamond market with the help of
skilled people. These skilled labour are our
biggest asset. And a similar credit goes to the
great diamond entrepreneurs of surat who
have tilted the compass of diamond market
toward east.