DiamondBuzz
CRISIL RATINGS: Diamond Exports dip ~10% this fiscal as tariffs take effect
The 10% additional tariff levied by the US, which accounts for nearly a third of Indian natural diamond exports, will exacerbate the impact on Indian diamantaires from already-subdued demand and intensifying competition from lab-grown diamonds (LGDs), which closely resemble natural diamonds and cost much less. In the milieu, export revenues of diamantaires will decline ~8-10% in fiscal 2026.
That said, calibrated inventory management across the value chain will support realisations, thus helping reduce the decline in export revenues, and limit the erosion of operating margins, helping contain the players’ financial leverage and credit metrics.
A Crisil Ratings analysis of 43 diamantaires, accounting for nearly one-fourth of the industry revenues, indicates as much.
In fiscal 2025, the export volumes of natural diamonds remained constrained by lower demand from China and competition from LGD in the US. Although polishers pushed sales in the fourth quarter to avoid tariffs and price erosion was limited, revenues from natural diamond exports fell 17% to ~$13.3 billion.
Says Rahul Guha, Senior Director, Crisil Ratings, “This fiscal, realisations on natural diamonds are poised to rebound 3-4% amid limited inventory across the value chain as diamantaires are aligning their rough purchases with visibility in sales of polished diamonds. Additionally, production cuts by miners will curtail price erosion. This contrasts with LGD, whose prices may reduce from a tenth of the price of natural diamonds last fiscal to a twelfth in the current fiscal, resulting in a wider price gap between natural diamonds and LGD.”
The rising price gap, in turn, could shave a further 12-14% off natural diamond export volumes, marking a third consecutive year of weak demand after an aggregate degrowth of 32% in the last two fiscals. That will make it difficult for the natural diamond polishers to pass on any tariff-led price hikes to customers. For the record, India will remain the primary port of call for polishing diamonds.
Says Himank Sharma, Director, Crisil Ratings, “Natural diamond polishers, traditionally operating at thin margins of 4-5%, will have limited ability to absorb the tariff-induced price rise. As a result, miners and retailers may need to step in to absorb some of the price shocks. Consequently, we believe the operating margins of polishers may dip 20-30 basis points to 4.3-4.5% this fiscal.”
Credit profiles of diamantaires might witness some working capital respite as weak demand will lead to a further 5-7% cut in inventory levels across the value chain (after a 10-15% decline last fiscal). This will limit the need for debt-funded working capital, although receivables from export customers will remain monitorable amid tepid demand, geopolitical issues and global uncertainties.
As a result, diamantaires’ financial leverage – total outside liabilities to adjusted networth – and interest coverage will remain rangebound at ~0.8 time and ~2.5 times, respectively, this fiscal.
All said, slowing demand for natural diamonds in key geographies, intensifying competition from LGDs, potential revisions in tariffs and rising geopolitical tensions will bear watching.
DiamondBuzz
De Beers Group Sets Out Portfolio and Organisational Actions to Support Long-Term Value Creation
Company outlines strategic cost optimisation, portfolio streamlining and operational changes to strengthen resilience while positioning for long-term growth in the natural diamond industry.
De Beers Group is advancing delivery of its business streamlining by setting out a number of planned portfolio and organisational changes to ensure an efficient cost base that strengthens resilience in the near-term while enhancing future competitiveness and retaining optionality as industry conditions improve.
Since 2024, De Beers has been streamlining its business in line with its Origins strategy to reduce costs, divest non-core assets and prioritise investment in activities that create the most value. Significant progress has been made, with more than $100 million of annual overhead costs removed from the business, the sale or closure of a number of non-core assets and significant capital and cost reconfigurations to asset expansion projects.
Simultaneously, De Beers has reinvested in natural diamond category marketing to support the industry’s efforts to grow natural diamond demand, launching new large-scale campaigns and collaborating with key stakeholders across the value chain to foster industry-wide investment. Global consumer demand for natural diamond jewellery returned to growth in 2025, while natural diamond sales increased across US independent jewellers in 2025 and into Q1 2026, led by higher value diamonds and those promoted by De Beers’ Desert Diamonds marketing campaign.
On the supply side, global rough diamond production is now decreasing, with several producers closing mines during 2026. Whilst the increasing rarity of diamonds and the emerging signs of improvement in consumer demand are likely to support longer-term value creation, rough diamond trading conditions are expected to remain challenging in the near-term due to cyclical and industry-specific factors.
Consistent with recent actions to improve business resilience, De Beers intends to pause production at the Venetia mine in South Africa for two years to reduce costs while also rephasing capital expenditure on its underground project. This will involve critical infrastructure investment to enhance the capacity and efficiency of the mine, with the intention to support future production growth as business and industry conditions improve.
De Beers is engaging with stakeholders in accordance with relevant requirements and the company’s values as it moves through this process, and will both support impacted employees and continue to invest in its community and Social and Labour Plan commitments.
This proposed action at Venetia Mine follows the decision earlier this year to pause the Tuzo Phase 3 expansion project at the Gahcho Kué Mine in Canada.
In parallel, De Beers plans to reconfigure its global operating model to refocus and prioritise resources on the core operational businesses and reduce its central corporate cost base.
Al Cook, CEO of De Beers Group, said:
“In line with our commitment to focus and streamline our business, we are making a number of changes to De Beers to ensure greater business resilience in the near-term, while supporting long-term value creation. We recognise the protracted challenging conditions as the diamond industry evolves, though we are encouraged by signs of consumer demand growth in the US and beyond, particularly in higher quality diamonds.
Global rough diamond supply is falling, bringing more support to the market. The changes we are making to our business are focused on underpinning our efficiency now and into the future, favourably positioning De Beers in its leadership role.”
De Beers Group will maintain current production levels through its other operations, and previous production guidance remains unchanged.
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