I am trying to edit raw 16bit images in DigiKam. The photos are .NEF taken with a Nikon D5300. No matter how much I fiddle with the Raw Import Tool my images look darker, redish and have low contrast (see image ). The preview looks good, however. What is the correct way to decode raw 16 bit images?
You are handling RAW files. Obviously the picture in DigiKam will not match the preview image, having a fixed white balance, contrast, etc. RAW images store far more dynamic range than a JPEG does, too. You have to process the RAW image, using curves or all the available controls to arrive at a pleasing picture. There is nothing wrong with your "decoding" of raw images, your job of post-processing starts here.
If you are new to RAW post-processing, maybe you should try Lightroom to have a taste of what you can accomplish.
If importing 16 bit RAW in DigiKam you might want to consider generating and using color profiles for your camera.