Weekend Economists Commemorate the Dark Knight July 25-27, 2014

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23. De Beers Sees Resurgent Diamond Demand in Modi’s India

http://www.bloomberg.com/news/2014-07-25/de-beers-sees-resurgent-diamond-demand-in-modi-s-india.html

De Beers expects new Indian Prime Minister Narendra Modi to champion the diamond industry and sees a return to growth for the world’s third-biggest market.

“India is the good news versus last year,” Philippe Mellier, De Beers chief executive officer, said in an phone interview in London today. “It is clearly starting to grow again. The election of Mr. Modi is clearly changing the paradigm there. We all believe he is going to support the industry.”

Mellier said he expected “high single digit” growth in Indian demand in the second half of the year, reviving a market that’s lagged behind after volatility in the rupee reduced consumers’ buying power. Global diamond demand will probably rise 4 percent to 4.5 percent this year with U.S. consumption increasing as much as 6 percent, he said.

De Beers, the world’s biggest diamond producer, is increasing output of the gems to meet demand. The company mined 16 million carats in the first half, a 12 percent increase from last year, and Mellier said full-year production would be “closer” to the top end of its 31 million to 32 million carat range.