India could not have asked for a better start to 2011. With the Kimberley Process (KP) moving one step closer to allowing the export of Marange diamonds, India has reason to cheer. The approved proposal still has to be formalized before shipments can begin, but Indian dealers are hopeful that diamond rough supplies from the Zimbabwe mines will be reaching them shortly.
“This definitely comes as good news considering India was facing a shortage of rough,” said Sanjay Kothari, vice chairman of India’s Gem and Jewellery Export Promotion Council (GJEPC). “Very soon we shall see the shipment of the stock piled up in Dubai reaching India.” The local industry had been very concerned about rough it had ordered from Zimbabwe that was being held up in Dubai awaiting a KP certificate. Meanwhile, the KP was considering whether to embargo all diamond exports from Zimbabwe because of alleged human rights abuses at its Marange mines.
GJEPC Events
In its first time in Mumbai, the IIJS Signature show held in January attracted more than 400 exhibitors, according to the GJEPC, the show’s sponsor. The show had been held in Goa for the past two years but moved to Mumbai this year because it needed additional space. Kothari said that in terms of the show’s objective of “facilitating personal interaction between the industry players and the buyers, the show was a success. Our main objective in having the January show in Mumbai was to do justice to the industry players who cannot make it to the IIJS August show.”
Though pleased with the overall response to the recent show, Rajiv Jain, GJEPC chairman, said more work needs to be done to promote colored stones and gems. “The show generated good response for the business of diamonds and diamond jewelry, but there was lukewarm response for colored stones and jewelry,” explained Jain. “It is time we take initiatives to promote the business of colored stones and jewelry in India and in other countries.”
In another initiative to promote the industry, GJEPC has scheduled a Trend Jewellery Forecasting (TJF) seminar from February 28 through March 1, 2011, at the Hyatt Regency hotel, in Mumbai. The seminar is designed to educate industry players in jewelry design trends in the international market, particularly in Europe and the U.S.
Market Dynamics
More good news for the industry is the pace at which the domestic Indian market, as well as the crucial U.S. market, is growing in terms of demand for diamond jewelry. The holiday season proved to be most profitable for the industry this year. “There was good demand not only from the U.S. market, but also from the European market and the Middle East as well,” said Jain. “If the trend continues, we shall easily see growth of 25 percent to 30 percent in demand for diamonds and diamond jewelry, not only internationally but domestically as well.” In other issues important to the diamond industry in 2011, Jain is hoping the Indian government will revise its position on the fixed-rate “presumptive tax” it charges diamond dealers on their “presumed profit” and, in fact, Jain discussed the tax in a recent meeting with Pranab Mukherjee, India’s finance minister.
“Blood Diamond” Revisited
A diamond artisans organization in Gujarat is planning to produce a docudrama highlighting the alleged exploitation of some 500,000 workers in Surat’s diamond processing units, according to a recent news report. Hasmukh Moradiya, president of Ratna Kalakar Sangathan (RKS), the organization of diamond workers that is producing the movie, said the 45-minute film, titled “Black Diamond,” will narrate the plight of poorly paid diamond workers, some of whom committed suicide in 2008 when global demand for polished diamonds slumped. The movie will be filmed in Gujarati and dubbed in Hindi and English.
On the subject of financing, Moradiya said RKS has 15,000 registered members, each of whom is expected to contribute to a $17,000 fund to help finance the project. In addition, there will be fund-raising efforts. DVDs of the film will be sent to organizations such as GJEPC and the KP, along with such mining giants as South Africa’s Diamond Trading Company (DTC) and Russia’s ALROSA.
“I have seen the news reports but we have received no official communication about the film,” said Kothari. “I understand that the industry is facing an issue with regard to the wages of the cutters and artisans. I also understand that their wages have not seen an increase, as other industries have. But now, with the market showing positive signs of development and improvement, I expect that a necessary correction in the wages will soon take place. The diamond industry is facing a shortage of manpower, especially skilled manpower. The workers who moved to other industries during the economic downturn are not yet ready to return.” To address the issue of the shortage of skilled manpower, Jain said more training institutes need to be established and he noted that GJEPC is willing to support such institutes.
January 2011 saw continued demand for smaller and lower-quality goods. This is not only because of the lower costs for these goods, but also because of the shortage of raw materials for better-quality goods. In colored stones, except for ruby and emerald, there is not much demand in India.
The Marketplace
• It is a sellers’ market.
• A positive beginning to 2011 made the market lively.
• Prices are shooting up in all categories due to shortages of goods.
• Many manufacturing units have still not reopened after the holiday shutdown or are working at less-than-full capacity.
• Buyers are concerned about ever-increasing prices.