The rating firm said that in the first nine months of this fiscal, India''s total diamond exports by value were down 18 per cent year-on-year.

"About 40 per cent of these exports are to Hong Kong, which has seen dysfunctional local markets over the past year or so. Moreover, there has been no diamond exports to the island since January 15 this year," it said.

Subodh Rai, Senior Director, CRISIL Ratings, said: "Exports would continue to fall in the closing quarter of this fiscal, which typically accounts for roughly a third of India''s exports to the south-east Asian region."

Besides, Crisil said that the n-CoV impact couldn''t have come at a worse time for an industry that has been buffeted by tepid demand, declining realisations, and the ongoing political conflict in Hong Kong.

Even if the n-CoV outbreak is contained in the next two months, trade normalcy and demand uptick from Hong Kong is unlikely before the middle of next fiscal.

Consequently, exports next fiscal would remain down or be at best flat because any traction in the second half would be offset by the weak first half, the report added.