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India
By Zainab Morbiwala
The issue of natural versus synthetic diamonds took center stage in 2015. Going forward, 2016 will see some very strong actions being taken by the Gem and Jewellery Export Promotion Council (GJEPC), the leading organization for gems and jewelry in India, to curb any unethical practices leading to the mixing of natural and synthetic diamonds. Emphasizing the importance of this issue, GJEPC plans to establish a Natural Diamond Monitoring Committee (NDMC) in Surat, following the success of the initial launch of the committee in Mumbai in 2013.
In December, the first-ever Diamond Detection Expo and Symposium (DDES) on the issue of the mixing of synthetic diamonds with natural diamonds was held in Mumbai by GJEPC in association with the Bharat Diamond Bourse (BDB). This event highlighted the council’s commitment to the cause of fair business. It brought industry leaders together to discuss and share their views on synthetics and learn about the technology to help detect them. On display was the latest equipment with presentations by service providers on how they worked. In a press statement, Anoop Mehta, BDB president, said, “At BDB we wanted to protect our members from synthetic diamonds. We expect DDES to address this issue directly and find an appropriate solution for this matter.” Sharing some numbers on the impact made by synthetic diamonds, Ashish Mehta, an organizer of the NDMC, said, “At this time, the level of synthetic diamonds is not a major issue, but it is very essential that we make it a point that it does not affect the real diamond industry.” In an exclusive interview with Rapaport Magazine, Praveenshankar Pandya, GJEPC chairman, elaborated on the formation of the NDMC in Surat, “We formed the NDMC in Mumbai and we banned the trading of synthetic diamonds in BDB and that has yielded very positive results. Now, for every business and response that is conducted here where samples are sent to the Gemmological Institute of India (GII), we are not seeing any parcels with any mixtures. We have taken strong actions against complaints that we received. In Mumbai, more or less, things are streamlined and actions have been taken that have secured the businesses. I want to do a similar thing in Surat and a very strong committee is being formed. The council will be starting this work through GII, and many more machines will be made available. Once we have completed the NDMC in Surat, we will proceed to other places like Bhavnagar.” According to Pandya, the formation of the committee has begun, with the formal announcement to be made this month. He added, “We are negotiating with manufacturers for more machines — both for Surat and Mumbai. This is an investment we are making to ensure that India completely sanitizes the footprint for natural diamonds in India.”
2015 remained a cautious year for the industry. The major concern remained the slowing down of the Chinese and European markets. In India, the gems and jewelry industry battled the issues of taxation and the volatility of gold prices. Pandya summarized the journey covered by the industry this past year: “2015 was not a great year for the industry, with major markets not responding very well, except for the U.S. In particular, China and Europe did not perform well at all. The industry has seen a crisis of profitability and an excess of inventory. Though I must say that from October on, there were signs of improvement. If we look at the performance of the industry post-October 2015 onwards, we can expect 2016 to be a good year. However, it may be premature to say that as unfortunately the activity in rough always tends to pick up speculatively, which is not very good for the industry. If the prices firm up before the real market has firmed up, it is a cause for worry. So the situation as of January is that we are hoping for good demand from the market.” The morale of the industry is largely dependent on the data received from the U.S. this month, which, he says, “will instill confidence for people to stock and place orders.” Sharing an industry perspective, Sanjay Shah, director, Gold Star Diamond Pvt. Ltd., noted, “It is very clear that the demand is low, especially in the Chinese and Indian market. The U.S., comparatively, was better, but the sales were lower than what we experienced in 2014. This year we also witnessed the Diamond Trading Company (DTC) giving false projections of demand and pushing the rough down the manufacturers’ throats and this has led to overstocking. Keeping in mind the way our industry works, it is not surprising that at the manufacturing level, people have no idea of how retail sales shape up and why sales drop. This was the highlight for 2015.”
On a concluding note, Pandya stated that his priority list for 2016 also included the resolution of the presumptive taxation issue in India, which would enable international players to set up offices and operations in India.Article from the Rapaport Magazine - January 2016. To subscribe click here.
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