Alrosa: December Sales Plunge Due to Indian Demonetization

(IDEX Online) – Russia's Alrosa said December sales fell 31 percent from November, after small and middle-size Indian diamond-cutting companies were hit by the government's banknotes reforms.

India’s imports of rough diamonds fell 4.7 percent to close to $1.4 billion in December from the same month a year earlier, according to provisional figures from the Gem & Jewellery Export Promotion Council (GJEPC).

The banknotes reform is making it difficult for smaller firms to operate, since they traditionally conduct business in cash.

The government announced in November that 500- and 1,000-rupee banknotes, or 86 percent of the value of cash in circulation, would be removed as part of a fight against corruption and tax evasion.

Meanwhile, Indian exports of polished diamonds surged 22.5 percent higher on the year in December to $1.478 billion, the GJEPC said.

Demand for goods was reportedly strong from the United States and Europe for the holiday season.