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India
By Zainab Morbiwala
Leading Indian diamond and diamond jewelry manufacturers had the opportunity to interact with top U.S. jewelry retailers at the Indo-U.S. Jewellery Business Development Conference (BDC) held in May in Chicago, Illinois. Sponsored by the Gem & Jewellery Export Promotion Council (GJEPC), the BDC was the first of the three conferences to be held in the U.S. Aimed at strengthening the jewelry trade between India and the U.S., it provided Indian exporters with a firsthand understanding of jewelry design preferences in the U.S. market. Speaking exclusively to Rapaport Magazine, Sabyasachi Ray, executive director of GJEPC, described the event as “a buyer-seller meeting with 20 top sellers from India and nine leading retailers from the U.S.” The four-day event focused on issues of common interest to both groups. It included presentations by industry experts on topics ranging from technological advancements to promoting jewelry as a category. A joint supplier-retailer moderated panel session focused on the need to create an industry-collective marketing and advertising program to fill the void left by De Beers when it curtailed its longstanding policy of broad-based advertising and promotion in the North American market. Another session consisted of “speed dates” to facilitate direct one-on-one meetings between the retailers and the manufacturers. Conference leadership pledged that GJEPC would incorporate the new coalition’s perspective in its ongoing discussions on a global level. Attendees affirmed the value of continuing the BDC series and related activities as a forum to address industry issues.
The BDC followed the recent visit by a delegation of government and industry officials to the opening of the World Jewelry Hub in Panama City, Panama, in April, an initiative by GJEPC to boost India’s trade relations in the Americas. Speaking exclusively to Rapaport Magazine, Pankaj Parekh, GJEPC vice chairman, noted, “Panama is a good destination for Indian diamond players. It is a good link between the rest of the world and Latin America. Latin America is an up-and-coming economy. It is also an up-and-coming market. Although it does not have a great history of buying expensive jewelry with big, quality diamonds, it soon will have. Before it is too late, the Indian diamond players should have a presence in this growing market. “We also went to Mexico, which again is a good market,” continued Parekh. “The country’s consumers have a history of wearing 10-karat gold more than they do diamonds, although they do wear small diamonds. We also visited Brazil, where people favor small diamonds and colored stones. It was a good trip. As a result, a large delegation from Mexico will be visiting India to source jewelry.”
In an attempt to streamline financial transactions, avoid defaults and promote transparency, the Surat Diamond Association (SDA) is eliminating the traditional practice of using paper chits for diamond deals. It is replacing it with a more reliable system that includes the exchange of promissory notes, post-dated checks and jhangad, an entrustment note. The move follows a series of significant defaults among diamond merchants and manufacturers. In the existing method used by small-time players, paper chits are exchanged and the buyer and seller agree on the payment for a quantity of goods sold in a specific time frame in the form of credit for a period of 60 to 120 days. The problem with using paper chits was highlighted in a report published in The Times of India in April, which cited the case of 50 manufacturers and traders from Varachha’s Sardar market who claimed they were cheated by a trader. Since the evidence was in paper chits, the creditors were not in a position to take legal action.
The falling rupee rate against the dollar is creating continued anxiety in the gems and jewelry industry in India. The overall market for gems and jewelry in India is going through a lull. Vipul Shah, GJEPC chairman, also cited a proposal to require personal identification for jewelry purchases above a certain amount as a roadblock in the domestic market. “April was a slow month for exports,” Shah pointed out. “Overall, there was a decrease of 10 percent according to our data.” However, he cited “good demand” for smaller goods, S, I, P and K, from the U.S. “The beginning quarter is always slow and this will continue through June,” Shah went on to say. “Currently, profitability is a major concern. From July onward, we are expecting good demand, especially from the U.S. market.”Article from the Rapaport Magazine - June 2015. To subscribe click here.
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