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India
By Zainab Morbiwala
The first-ever Global Gem and Jewellery Fair (GGJF) to be held in Dubai was so successful that it is expected to become an annual event on the diamond industry calendar. Organized by India’s Gem and Jewellery Export Promotion Council (GJEPC) and Dubai Multi Commodities Centre (DMCC), which is Dubai’s global gateway for commodity trade and enterprise, the show was held at the iconic Atlantis, The Palm. The show attracted 130 exhibitors from India and the six Gulf Cooperation Council (GCC) countries — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) — who displayed a lavish spread of diamond and gem-studded jewelry, modern and traditional plain gold jewelry and fine-quality loose gemstones. T.P. Seetharam, ambassador of India to the UAE, DMCC Executive Chairman Ahmed Bin Sulayem and GJEPC Chairman Vipul Shah opened the fair. Pankaj Parekh, vice chairman of GJEPC, stated that India exported around $14.4 billion worth of gold jewelry to the UAE in 2013. “We did a lot of research before stepping out of India and found Dubai to be the most comfortable and conducive place to do business,” he said.
The show had high-profile visitors from Pakistan, Malaysia, Sri Lanka, Russia, Europe and the GCC countries looking for jewelry that had interesting design elements and was either classic or lightweight. Priyanshu Shah, managing director of Asian Star Jewels, Mumbai, said that “We had a number of new buyers who preferred lightweight chandelier earrings with fancy cut diamonds and broad bangles pavé-set with diamonds and gemstones. Jewelry pieces that looked opulent yet were cost effective moved well.” Anup Bohra, managing director of Jewels Emporium, Jaipur, found new buyers at the fair from Lebanon, Dubai, Saudi Arabia and Ukraine for his high-end three-dimensional masterpieces inspired by nature. A spokesperson for Supergems Jewellery said his firm met with new clients from Dubai and Pakistan, adding that “We already have established clientele in the Middle East, U.S. and Australia.” Haresh Pahuja of Itan Jewels said he entertained new buyers from China, Saudi Arabia, Singapore and Malaysia.
The April 10 signing of the memorandum of understanding (MoU) between GJEPC and ALROSA, Russia’s largest miner, is expected to dramatically improve trade ties between India and Russia. Under the agreement, both countries will share diamond trade and statistical data. In a press release issued by the GJEPC, Council Chairman Shah stated, “India has long sought long-term contracts between ALROSA and the Indian cutting and polishing industry. With this association, both trade bodies look forward to cooperation and the exchange of information in the framework of the Kimberley Process Certification Scheme and jointly seek to maintain separate sales of natural and synthetic diamonds and diamond jewelry. This is just the beginning and we look forward to strengthened trade relations between India and Russia.” Direct imports would bring benefits to both ALROSA as well as the Indian cutting industry, Indian diamond dealers say. Streamlining overall trade procedures could also see increased Indian exports of polished diamonds to Russia. Indian dealers already have a significant presence at the Moscow Diamond Bourse and relations between the diamond dealing communities of both nations are warm and close.
The Indian diamond industry got both bad news and good news from the country’s banks in April. The bad news was that banks are drastically reducing lending for rough purchases, according to The Times of India. Antwerp Diamond Bank and ABN AMRO, the industry’s two biggest lenders, have already reduced lending to 70 percent of the cost of rough diamond purchases, meaning buyers have to put up more of their own cash to close deals. The changes are in response to a rising number of loan defaults by diamond companies in recent years, in addition to the continuing imbalance in rough-polished prices, with rough rising too fast while polished prices remain stable. In the good news category, the Reserve Bank of India (RBI) has liberalized its import rules to allow Indian diamond traders and manufacturers to directly import rough diamonds from any mine with advance payment without any limit and without a bank guarantee or standby letter of credit. The rule change by RBI is expected to especially benefit the small and midlevel diamond companies because it will expand the number of miners from whom they can purchase rough. Under the previous rules, which were put in place by the RBI in 2007, only five and eventually nine global miners were on a list approved for an unlimited advance remittance on rough orders. As a result, traders had to rely on the secondary markets in Mumbai and Surat for their rough supplies, where they were charged a markup of anywhere from 10 percent to 20 percent.Article from the Rapaport Magazine - May 2014. To subscribe click here.
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