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India
By Zainab Morbiwala
July failed to bring any change in the the state of the gem and jewelry industry in India. However, the country’s leading industry group, the Gem and Jewellery Export Promotion Council (GJEPC) is still actively trying to effect change. These efforts range from promoting diamond jewelry through an agreement with the Diamond Producers Association (DPA) to taking initiatives to curb the mixing of synthetic diamonds with natural diamonds.
Speaking exclusively with Rapaport Magazine, Praveenshankar Pandya, chairman, GJEPC, shared details of Quick-Check, a new machine designed to detect synthetic diamonds from the natural ones in loose form and also easily detect them in jewelry. According to Pandya, Quick-Check would be made available at all leading diamond trading centers within the country. Retailers as well as manufacturers would be able to access the machine for their use. Quick-Check was developed and designed by the Gemmological Institute of India (GII), in collaboration with Arotek. Development was cosponsored by the Bharat Diamond Bourse (BDB). Pandya, who has expressed concerns over the growing penetration of synthetic diamonds in the market, believes that initiatives like this will help track and keep in check any issues of the mixing of diamonds. (For more of Pandya’s views on synthetic diamonds and other key diamond issues, see “Bringing the Industry Together” in Cover Stories section.)
In Surat, diamond trading is based mostly on mutual trust, especially for small and medium-sized companies. In the event the middleman, trader, buyer or seller absconds with the goods or funds, or refuses to be party to such a deal, a police complaint for fraud cannot be filed since there is no proof or documentation of the deal. This is referred to as the chitti system. Since 2015, Dinesh Navadia, president, Surat Diamond Association (SDA), has been trying to convince members of the trade to replace chitti with a promissory note system. Navadia points out that to date, less than 5 percent have switched over to promissory notes. Speaking exclusively with Rapaport Magazine, Navadia told of plans to hold a high-level meeting in August with the commissioner of the Surat police and representatives of GJEPC to discuss the merits of a promissory note as compared to the traditional system. Unlike chitti, the promissory note includes all relevant details, including the parties involved, the monetary amount, a description of the goods and also carries a revenue stamp.
Navadia points out that +11 goods are doing well compared to the other goods, but otherwise, the market is more or less slow and sluggish in terms of demand. It should be noted that sales of online jewelry, especially diamond jewelry, are picking up in India, with the number of players in this space increasing daily. According to Kaushik Mukherjee, CEO, Jewelsouk, an online marketplace, their growth is close to 8 percent to 9 percent month on month. Jewelsouk, which is a part of the Gitanjali Group, initially only offered brands from the Gitanjali portfolio, but for the past four months, they have begun offering other brands as well. Mukherjee, in an exclusive interview with Rapaport Magazine, explained, “Diamond jewelry and, for that matter even gold jewelry, is no longer being looked upon as an investment. It is moving toward being more of a fashion-based purchase. In diamonds the most attractive price point is anywhere in the range of 5,000 rupees to 15,000 rupees — about $75 to $225. Contrary to the expected norm that online does not attract high-value purchase, we have seen customers buying expensive jewelry from our portal and even going a step ahead to ask to customize their jewelry.”Article from the Rapaport Magazine - August 2016. To subscribe click here.
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