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India Strengthens Position in Diamond Cutting
Dec 12, 2018 9:46 AM
By Rapaport News
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RAPAPORT... India increased its dominance in cutting and polishing last year due to relatively low costs that gave it a competitive advantage
over China, according to Bain & Company.
The Indian diamond-manufacturing industry grew 11% in 2017,
outpacing the Chinese market, which increased 2%, Bain reported. That left
India with more than 90% of the market, versus China’s low-single-digit-percentage
share, the consultancy firm said in its 2018 Global Diamond Report, which it
published last week in partnership with the Antwerp World Diamond Centre
(AWDC).
India’s manufacturing sector has benefited from cheaper
labor, improvements in workers’ skills, advances in technology, and a favorable
regulatory environment. Those factors also helped the country increase its production
of large stones, a more profitable segment, Bain explained.
Relatively easy access to financing further contributed to
the 2017 rise, as credit enables cutters’ to buy and process larger rough
diamonds. While banks tightened lending in 2018, the more transparent and
financially healthier companies have managed to weather that challenge, it
added.
Costs in China are also low by global standards, but are
still higher than in Indian hubs such as Surat, putting pressure on the ability
for the country to grow its sector, Bain said.
Polishing in other countries, such as the US, Belgium and
Israel, declined 6% due to high costs and an ageing workforce, the report
continued. Africa failed to gain significant market share due to low productivity
and relatively high costs.
Global revenues from cutting and polishing rose 2% in 2017,
with manufacturers realizing profit margins of 1% to 3%, Bain said.
Image: Rough-diamond cutting and polishing. (De Beers)
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Tags:
2018 Global Diamond Report, Antwerp World Diamond Centre, AWDC, Bain & Company, cutting and polishing, Rapaport News
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