Cash is king for diamond market reeling from India’s money war
London — As diamond traders descend on Botswana this week for one of the year’s biggest sales, the $14bn industry is struggling to recover from India’s war on black money. De Beers, the world’s top producer of gems, will offer customers concessions for a second consecutive buying round to support the market, according to people familiar with the process, who asked not to be identified because the information was not public. The industry has been hit after India imposed wide-ranging currency reforms in November that created a cash crunch. As much as 90% of the world’s rough diamonds pass through India to be cut, polished or traded by the thousands of gem companies. "The Indian demonetisation programme is showing how much of the polishing industry is still a cash business," said Richard Chetwode, an industry consultant and former executive at Dominion Diamond and Gem Diamonds. The company’s first sale of the year, which gives traders a chance to replenish stocks following the crucial ...
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