You'd think this summer would be a great time to shop for that diamond engagement ring.

The wholesale price of a one-carat diamond fell nearly 4% during the first half of the year, and is 14% lower than last June, according to diamond-trading network The Rapaport Group. This plunge stems largely from economic woes in India, which along with China and other countries in Southeast Asia, saw demand for diamonds grow in recent years, says Martin Rapaport, chairman of The Rapaport Group. "Even the domestic market, which was very strong, got whacked as a result," he says.

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