India reiterates demand for direct supply of rough diamonds

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Namrata Kath Hazarika | 19 Feb, 2011
The gems and jewelry sector in India, consisting of large number of small and medium enterprises (SMEs) is once again seeking to source rough diamonds directly from major diamond mining destinations such as Botswana, South Africa, Russia, Congo, Canada, and Australia for which India's diamond industry is developing one-on-one interaction with the neighbouring countries to meet the demand for rough diamond in India, the Gems and Jewelry Export Promotion Council (GJEPC), Executive Director, Sabyasachi Ray said.

Pointing out the present challenges faced by gems and jewelry sector while sourcing rough diamonds, Ray told SME Times, "India usually sources rough diamonds from the trading centers of Bangkok, Dubai and Hong Kong. But now we are trying to make one-on-one discussion and contacts with the neighbouring countries for sourcing rough diamonds directly from them to India."

India is looking for long-term supply contracts with major diamond mining destinations all over the world, he added.

In fact, South Africa-based De Beers, one of the major diamond producer in the world, has already decided to increase its diamond output by 15 percent this year to 38 million carats from 33 million in 2010, in order to cater and supply to the needs of rising global demand worldwide.

In 2009, the world's leading rough diamond company, accounting for nearly 40 percent of the global market share, produced 24.6 million carats.

Ray further added, "We are not able to meet the capacity requirements and this is a reason why India is trying to source rough diamonds from throughout the world. The kind of capacities India has developed all through these years, is actually difficult for India to cater to those capacities."

The capacity is huge for cutting and polishing in India. Suppose, if 50 percent of rough diamonds are being imported in India then 90 percent of that amount is cut and polished in India, Ray said.

While, India at present is witnessing shortage of rough diamonds by 30 percent, which is a major concern for the diamond processing industry, he said.

Last year, the prices of rough diamonds have climbed after producers like De Beers and many others have cut down output and gem dealers have also rebuilt stockpiles. While, due to the fillip in the jewelry sales in the major destinations such as the United States, China, Hong Kong, South America, United Aran Emirates and Commonwealth of Independent States (CIS) countries, the DTC rough diamond prices rebounded by an average of 27 percent.

According to the data available with GJEPC, India's diamond trade during April-December current financial year has been at US$ 7.9 billion, around 20 percent growth as compared to the corresponding fiscal which was at US$ 6.3 billion.