There was little surprise when Time magazine named Donald Trump its ‘Person of the Year.’ Love him or hate him, Trump left his mark more than any other individual on 2016. Notably, the choice says as much about the impact he will potentially make as it does about his historic election.
When deciding the most important story for the diamond industry in 2016, we’ve used a similar criterion. Among the many milestones, controversies and inspiring stories that headlined during the year, the most significant will surely be the one with a lasting influence on the trade.
In that sense, Trump’s election could well be considered. Diamond dealers are certainly most optimistic about U.S. demand. Not only has the U.S. supported global demand while other markets remained subdued, but Trump’s policies are largely expected to improve trading conditions. We’ll have a better indication if he delivers on his promise to lower taxes and create jobs – and consequently raise diamond purchases – after he takes office.
Demonetized Indian demand
Still, when considering political developments that influenced diamond trading this year, the U.S. election is overshadowed by India’s demonetization policy. In fact, if we embarked on a Time-like search for the person who most impacted the trade in 2016, Prime Minister Narendra Modi would be the likely choice.
His bold decision to eliminate 500 and 1,000 rupee notes, taking about 85 percent of currency out of circulation, had an immediate dampening effect on India’s influential diamond trade. Sales in the cash-driven domestic jewelry market fell, as did demand for lower-quality rough and polished diamonds.