There is little doubt the recent holiday season proved to be much better than 2008. Anil Shah from Venus Jewels said the local markets generated a good amount of business, although not as much as the overseas market. “Most of the goods moved well,” he commented. “Large stones and high-end stones were special attractions in our sales list at Venus.”
In demand this holiday season were dossiers in 1 carat and below and large stones, especially rounds and fancies in cushion and emerald shapes. VVS1 to VS2 in D to F colors also did well, and VS2 to I2 in G to J colors did extremely well.
Shah’s wish list for 2010 includes establishing an efficient distribution channel for mining companies to allocate rough; clarification of the tax issues related to value-added tax (VAT), octroi duties and central sales tax (CST); implementation of export tax incentives for companies operating outside special economic zones and progress on plans for an international airport at Surat to help clients reach the manufacturing centers more easily and quickly.
Commenting on what can be expected for the industry in 2010, Yogesh Bulchandani from Blue Gems cautioned that “Until the American and European countries improve, the diamond industry will remain at the same level. Right now, India and China are the only consumers. During the period of May to August in 2010, I feel the demand from these two counties will slow down. That would make midyear a difficult phase to pass through.”
International Conference
Recognizing the growing influence of the gems and jewelry industry, the Federation of the Indian Chambers of Commerce and Industry (FICCI) hosted its first international conference on the gems and jewelry industry in Mumbai on January 15, 2010. The theme for the conference was Opportunities Led Growth. Together with Technopak, FICCI released a report entitled “Unlocking the Potential of India’s Gems and Jewellery Sector.”
Addressing the industry experts present at the conference, Sushil Jiwarajka, chairman of FICCI’s Western Regional Council (WRC), said that innovation in design, tapping new markets and adopting new technology will help the Indian industry increase its share of the global market. He also stressed the importance of adopting transparency and fairness to achieve higher growth.
Sharing excerpts from the report, Anil Rajpal, vice president of Technopak Advisors, predicted that the domestic gem and jewelry industry would grow to $100 billion by 2015 from its current size of $45 billion.
Good News
Good news for the industry comes with the new agreement between the Gemological Institute of America (GIA) and the Surat Diamond Association (SDA). The arrangement provides for GIA to work with SDA and the Southern Gujarat Chamber of Commerce and Industry (SGCCI) to promote gemological education in Surat, the world’s biggest diamond cutting and polishing center, and to develop and retain talent in the industry.
Ashok Minawala, chairman of the projects committee for the All India Gems and Jewellery Trade Federation (GJF), expressed concern at the proposed Direct Taxes Code of India’s Ministry of Finance, which gives inspectors wide-ranging search-and-seizure powers to confiscate stocks of diamonds or bullion during raids.
Export figures showed impressive gains in December 2009 over the same month in 2008. The Gem and Jewellery Export Promotion Council (GJEPC) announced that the overall exports of gems and jewelry saw a remarkable rise of 45 percent for the month, to $1.9 billion. Exports of cut and polished diamonds rose 66 percent in December 2009 from December 2008, for a total of $1.3 billion.
Smuggling Accusations
For the Indian diamond industry, the new year began on a bad note with the detention of 21 Indians by the Chinese government on charges of smuggling diamonds into the country. This particular incident is not expected to go down well with the Indian industry. Commenting on the arrest, S.K. Seth, president of the Gujarat Diamond Association, remarked that trade between China and India had been going well and this incident may prompt the Indian diamond traders in China to return home and cease doing business with China.
What needs to be noted is that a number of Indian diamond companies have set up processing units in China and the recent arrests will definitely have repercussions. The names of those detained have not been made public so far by the authorities. SDA officials are in regular contact with the members of India’s Ministry of External Affairs (MEA), seeking additional information on those arrested.
The Marketplace
• The new year started very slow but demand began to pick up after the third week of January.
• Shortages exist in most categories as production is still not at full capacity.
• Sellers are asking higher prices due to an increase in rough prices.
• Demand has improved for D-F color in all sizes. G-I color is still the hot category.
• Demand is strong for 1 carat and has improved for 2 carats.
Article from the Rapaport Magazine - February 2010. To subscribe click here.