India, being one of the world’s largest diamond manufacturers, is lately turning into a no less earnest diamond consumer attracting hopes of the global jewelry industry. To boost this image, the Indian Gems and Jewelry Export Promotion Council is launching its now-annually-regular IIJS Signature 2010 to be held in Goa from the 19th to 22nd of February. In the run-up to this event, Vasant Mehta, GJEPC Chairman, has kindly agreed to share his view of the Indian diamond market in his interview to Rough&Polished:

How much profitable are direct supplies from immediate diamond-miners?

Direct supply of rough diamonds from the mining companies to the manufacturing centers like India would result in savings for the mining centers as well as the manufacturing ones. The presence of third party in distribution centers adds to the price of rough and sometimes creates artificial shortage resulting in speculative trends.

Are there any prospects for direct rough purchases by India from Russia?

Indian companies are already getting good amounts of direct supply from Russia and these amounts will increase manifold in near future.

What can you say about the Bunder Diamond Field perspectives? Is Rio Tinto going to supply rough diamonds from this mine to Indian diamond cutters?

I believe the production from any mine in India would first be offered to the Indian manufacturers and that the Government is already taking care of such stipulations.

What is India’s diamond export perspective in 2010?

I see a growth of minimum 5% over the figures of 2009.

Will India decrease its rough import in 2010?

Compared to 2009 the rough imports will increase in 2010. However this depends on the economic conditions in the consuming countries.

How much true are the statements that all the diamond market puts high hopes on consumers from China and India?

Diamond is a luxury product and is one of the last on the consumer’s list. The economies of India and China are on the growth path and will lead to good demands/sales of all luxury items including diamonds.

What is the outlook for Russian-Indian cooperation in the diamond sector?

Russia as a large rough supplier and a good market for diamond jewellery is an interesting new destination for the Indian manufacturers. With the new distribution policy Russia is also interested in establishing relations with the large manufacturing industry in India. It is a win-win situation for both the countries to extend co-operation in their mutual interest.

What hinders India’s expansion of its diamond production in other countries?

Heavy import duties and taxes are the major hindrances in many countries. In addition to this the non-availability of skilled labor and the amount of hassle in setting up production units in foreign land also discourages Indian manufacturers to set up production units in other countries.

How much efficient were the measures taken by the Indian government to back up the country’s diamond cutting industry?

The measures taken by the Government of India in reducing bank interests helped the industry to sail through the recessionary period easily.

Is there any chance that the recent detainment of Indian diamond businessmen in China will make India to stop its diamond business in China?

I don’t think so. Some Indian origin residents of China are detained for questioning for economic offences and the laws of the land will decide about those who are guilty. Business between the two countries will not only continue but will grow rapidly in the coming years.

India’s December 2009 net diamond account, representing total exports less total imports, fell to negative $389.9 million from positive $95.6 million a year earlier. Does it mean the country's domestic diamond consumption went up?

India is now a trading center and a hub of diamonds. The recent figures show a rapid growth in that sector. Manufacturing activities have declines to the tune of 25 to 30% due to reduced demands/sales in the consuming centers.

Some time ago Indian diamond cutters asked the Russian authorities to open ALROSA’s representation office in India to facilitate rough imports into the country. Was it opened and if not would such a move meet an interested party in India nowadays? What is the current situation with diamond supplies from Russia to India?

We would welcome Alrosa to open a sales office in India and sell rough Diamonds directly to manufacturers.

What is the annual demand for rough diamonds on the Indian market?

Our demands are to the tune of 10 to 12 billion US Dollars.

To what extent is India currently meeting its demand for rough diamonds?

Most rough diamonds end up in India and so we are able to meet our needs either directly from mining countries or through Belgium and Israel markets.

What is the present size of unemployment at Indian diamond cutting factories in percentage terms? In what way is this problem being solved?

We have about 800,000 skilled cutters in this industry.

What markets are viewed by India as most important for its polished sales?

China, Russia, and Middle Eastern countries presently are the most important markets.

Tatiana Alexandrova, Rough&Polished