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India
By Zainab Morbiwala
With the Chinese economy in turmoil, the Indian gems and jewelry industry has received another setback to the already existing slowdown it has been facing. Industry sentiments are at an all-time low. Except for the U.S., the other markets — specifically China and Europe — are not showing any signs of revival, which has resulted in extremely low demand for polished goods. According to Dinesh Navadia, president, Surat Diamond Association (SDA), the crisis in the Chinese markets has “beyond a doubt” adversely affected the gems and jewelry industry in India. Though the reason for diamond workers losing their livelihood cannot be attributed just to the Chinese slowdown, it is estimated that around 5,000 polishers from Surat have lost their jobs since June 2015. The demand from the Middle East, too, has been slow since the beginning of 2015. Speaking exclusively with Rapaport Magazine, Vipul Shah of the Gem and Jewellery Export Promotion Council (GJEPC) pointed out that the silver lining in the cloud was still a distant dream for the Indian gems and jewelry industry, with demand being comparatively lower this season. He also attributed the slowdown to the ongoing crisis of economies being faced across the world, especially in China. “Though production has been curtailed, we are not witnessing any signs of a balance in demand and supply,” said Shah. Anoop Mehta, president of the Bharat Diamond Bourse (BDB), on the other hand, offered a different perspective. He expressed his belief that eventually the industry would get accustomed to the situation and function accordingly.
Chandrakant Sanghavi, president, Gujarat Hira Bourse (GHB), spoke exclusively with Rapaport Magazine about the GHB project in Surat being officially declassified as a Special Economic Zone (SEZ) in order to extend flexibility to companies to supply both the export and domestic markets. While the Ministry of Commerce took this action, the GHB had voluntarily surrendered the SEZ status almost a year ago. Elaborating on the need for this change and how it will encourage positive development, Sanghavi shared, “We requested that the zone be denotified primarily because we were losing the benefits of selling in an open market. There were many procedural issues and hurdles that manufacturers within the SEZs are facing. Rules do not permit you to sell in the open market as the manufacturing units can only export based on the orders received. There would be a lot of unsold stock and because you are not allowed to directly sell in the domestic market, there is little you can do with these goods. We voluntarily gave up the SEZ status conferred to GHB and all the money that we owed to the government in forms of all the customs duty exemptions, tax relief, etc., was repaid with due interest.” Sanghavi noted that with the declassification, many more manufacturing units would be able to open at the GHB since the infrastructure there is well established. In another development that could boost investment in gold without actually buying it, the Indian government recently approved a proposal to launch gold bonds and a gold monetization scheme. Presented as part of the country’s annual budget released in February 2015, the move is expected to reduce gold imports. The bonds would be issued by the Reserve Bank of India (RBI) on behalf of the government in denominations of 5, 10, 50 and 100 grams of gold. On maturity, the bonds can be either exchanged for cash or physical gold, subject to certain restrictions. U.S. Consul General, Thomas L. Vajda, recently paid a visit to the BDB to understand the dynamics of the diamond trade in India. According to Mehta, this was a courtesy visit by the consul general in which he was briefed about the potential and size of the Indian diamond industry and facilities offered at the BDB that help support the diamond trade in the country.
Gemological Science International (GSI) has announced the launch of the only laboratory in India to begin batch testing for star and melee-sized diamonds using the latest state-of-the-art technology. In response to increasing demand for Fourier transform infrared spectroscopy (FTIR) services, GSI offers cost-effective testing by utilizing a powerful and robust mid-IR spectrometer used for routine and advanced laboratory analysis. Mark Gershburg, chief executive officer (CEO) GSI, explained, “The infiltration of synthetics into the melee trade has become a legitimate concern to the industry. We are happy to offer this service in Surat and hope to expand its use to our offices in Mumbai.” Commenting on the growing acceptance of synthetic diamonds, Shah noted that the industry is not threatened if the synthetic diamonds are sold ethically. He also pointed out that so far, there have been no cases reported where any manufacturer has unethically mixed natural diamonds with laboratory-grown diamonds.Article from the Rapaport Magazine - October 2015. To subscribe click here.
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