World diamond trade is slowing and the top supplier of gemstones sees the problem in the financial measures of India. The turnover of the leading company in the diamond trade De Beers fell to 418 million USD from 476 million USD last month, according to parent company Anglo American. According to the diamond seller, the decline is mainly due to the surprising move by the Indian authorities to withdraw from circulation the biggest my notes of 500 and 1,000 rupees in early November.
“The trade of rough diamonds with a lower value experienced a temporary slowdown due to the program of India, which caused lack of cash”, said the Chief Executive Officer of De Beers, Bruce Cleaver.
India has one of the fastest growing markets of diamonds in the world, according to a report of the company Bain & Company. The consultants point out that India is likely to surpass Europe and Japan, becoming the the world’s third largest diamond market in 2020.
But this success of a country is highly dependent on paper money, as more than 90% of the country’s transactions are made in cash.
The diamond trade is not the only industry impacted by the conversion of the largest bills recently in India in illegal tender. Several automobile companies in the Asian country also reported a decline in sales last month.
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