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India loses $1 bln of diamond exports after Surat floods

Diamond exports from India, the world's biggest processor of the stones, may drop by $1 billion this year after the nation's main polishing centre was flooded by heavy rains. Surat city in the western state of Gujarat, which accounts for 75% of India's diamond polishing industry, was swamped this month, forcing jewelry factories to shut for more than two weeks. India's jewelry exports were worth $16.6 billion last year, accounting for a fifth of the nation's export revenue. „These are our initial estimates,” Bakul Mehta, chairman of India's Gem & Jewellery Export Promotion Council, said in an interview from Surat on Aug. 23. „The losses could rise.” India needs faster exports to boost growth in Asia's fourth-largest economy, and narrow a widening trade deficit. The floods in Gujarat and the neighboring state of Maharashtra may have a serious impact on exports, Commerce and Trade Minister Kamal Nath said on Aug. 17, without giving details. Several diamond factories in Surat have yet to resume working at full capacity as workers left the city amid fears that the floodwaters could trigger outbreaks of disease, Mehta said. Equipment worth 3 billion rupees ($64 million) was damaged by the floods, he said. India processes 11 out of every 12 of the world's diamonds, accounting for 80% in terms of volume. Gem and jewelry exports, including cut and polished diamonds, dropped 4.4% to $4.8 billion in the four months ended July from a year ago because of volatility in the rupee, according to the council. Heavy rains in Gujarat and Maharashtra caused rivers and reservoirs to overflow. India ordered the army into Surat to help with relief and evacuation operations. (Bloomberg)