Indian Diamond Industry Heading Towards Top Position
The Indian diamond industry aims for top position in the world with the ‘Make in India’ theme that will boost the India’s diamond processing industry in a big way. Having created a niche for itself, India is a big centre for ‘cut and polished’ diamonds in the world with nine out of every ten diamonds in world being ‘cut and polished’ in India.
Despite a slowdown in the global diamond industry, Indian diamond industry possesses immense potential to increase its consumption. Global diamond giants are also eyeing Indian diamond industry not only for its processing capability but also for its huge market. A dozen leading Indian diamond processors tied up with the world’s largest supplier of rough diamond, Alrosa of Russia, in December 2014.
India’s diamond processing industry is in a way among the pioneers of the ‘Make in India’ theme, having embraced it decades ago. It has created a niche for itself and occupies a pride of place as being the centre for ‘cut and polished’ diamonds in the world with nine out of every ten diamonds in the world being ‘cut and polished’ in India. With such potential, a dozen leading Indian diamond processors tied-up wih the world’s largest supplier of rough diamond, Alrosa of Russia, in December 2014.
Speaking at a recent event, Philippe Millier, CEO of leading miner, De Beers, said that while the U.S. had a 42 per cent share of the global diamond market and China around 16 per cent, India, at a mere eight per cent, was the size of the Middle East market. “It has the potential to be 10-12 per cent soon given the government support and initiatives.” Mr. Millier felt that despite the continuing slowdown in global demand in the first quarter of the calendar, there were hopes of a demand revival in the second-half of the year with the Indian wedding season and a revival in the U.S. sales.
In the backdrop of a difficult environment for the industry, there have been positive developments for the Indian industry. Alrosa, world’s leading diamond supplies Indian companies around $700 million worth of roughs per annum for a period of three years. According to Anoop Mehta, President, Bharat Diamond Bourse, “with lower margins, inventories are down and some de-stocking is taking place. There is also some consolidation at the retail end in the U.S. In India, too, there could be some consolidation setting in at some point. Anyway, the April-July season is slack.” Besides, De Beers, which is serving its Indian customers through its trading office in Dubai and Antwerp, has decided to set up a rough diamond trading office in India. It already invested $10 million to set up a grading facility in Surat.
However, on the policy front though, some niggling issues remain. “The introduction of a presumptive or turnover tax will bring India on par with peer manufacturing centres such as Thailand, Israel and Belgium,” said Pankaj Parikh, Vice-Chairman, Gem & Jewellery Export Promotion Council (GJEPC) to Hindu. The industry also feels a big impediment to its growth could be the requirement of a PAN card for any transaction exceeding `1 lakh. “It would impact most industries but the diamond and jewellery industry in particular is being significantly impacted,” Ashok Minawala, a director and former chairman, All India Gem & Jewellery Traders Federation (AIGJF) told Hindu.