Posted on 16th Mar 2012 @ 12:40 PM

Buying diamonds for investment purposes is gaining traction in India, industry members said in The Times of India report. Volatile gold prices, a transparent diamond trade and tight gemstone supply are driving the demand for investment-grade diamonds.

"The diamond business worldwide has become more transparent than ever. Because of diamond certification, investors could [estimate] the exact value of the diamonds they are investing in. If you invest in 3-carat flawless round-shaped diamonds, you would get around 10 to 15 percent returns in a year,” Aagam Sanghavi, director of Sanghavi Export, was quoted as saying.

Mumbai-based diamond jewellery manufacturer Kaushik Mehta also said in the report that most of the company’s clients purchase large-sized gems, weighing 3 to 10 carats each, which they then keep as investments.

"Polished diamonds continue to offer steady price appreciation of 5 percent to 6 percent per annum," Sanjay Kothari, vice chairman of the Gems & Jewellery Export Promotion Council, also told The Times of India.