The Indian diamond industry started off on a good note in the month of February with the most coveted Show Signature IIJS 2016. At curtains, there was a sense of contentment and confidence among the industry players for the revival of the Indian gem and jewellery industry, which has been hit adversely due to global slowdown. The exhibitors not only expressed satisfaction at the well-organized show; but were happy at the many business enquiries that they received during the 4-day event. Despite the current slowdown in the market, the exhibitors expressed satisfaction at the visitors’ footfall, which was much more than they anticipated.
In addition, the visitors at the show were serious buyers. It is not a surprise that Signature IIJS succeeded in attracting serious buyers. And again, like in the past, the gold jewellery exhibitors attracted most buyers with a huge volume of goods traded over the four-days of the show. Satisfactory business was concluded in the loose diamonds and gemstone section as well. After attending the inauguration ceremony of the Signature IIJS, Andrey Zharkov, President of ALROSA and the company’s management visited the Special Notified Zone (SNZ) that was opened last year at Bharat Diamond Bourse. In his address at Signature IIJS, Zharkov lauded the successful efforts of officials and representatives of the industry community in India to develop diamond trade in the country. Following the Show, the annual event, Design Inspirations, a two-day seminar focusing on design organised by The Gem & Jewellery Export Promotion Council (GJEPC) was launched on February 9. The seminar is an important feature of the GJEPC’s annual calendar of events, and explores aspects related to jewellery trend forecasting.
The month of February also witnessed a flurry of activity in the trading of polished and rough diamonds in the diamond district of Mumbai. News trickled in about production picking up in Surat and that the diamond industry in Surat had picked up steam after it witnessed a slump in business last year. While business slowly picked up pace in the Surat, the return of workers gave a boost to the industry. It was also noted that difference between the production cost and sales price of polished have stabilized and manufacturers are beginning to see profits again. This change was attributed to steps taken by the diamond industry in India to control rough imports and polished production. Also, there were signs of improved demand for polished goods. Another consoling news was that in the past two months, Indian diamond market has witnessed certain categories of polished diamond prices increase 4-5 per cent, amid shortage of goods, which augurs well for the diamond manufacturing sector, which has been badly hit for a long time now. However, this might affect the retail demand for polished goods in India. India has become the third largest diamond jewellery consumer in the world after the United States and China in the US $80 billion global market.
However, the provisional data announced by the Gem & Jewellery Export Promotion Council (GJEPC) of India revealed another month of depressing results as India’s cut and polished exports for January 2016 declined by a huge 41.7 percent, recording $1044.81 mn as against $1792.68 mn in Jan’15. The global slowdown in the consuming markets has hit the Indian industry adversely so much that this trend threatens to continue for some time more. Rough imports recorded an increase of 16.4 percent to $990.15 mn for Jan. ’16 as against $851.38 mn in Jan ‘15. In volume terms too, an increased total of 12.25 mn cts of rough was imported in Jan.’16 compared to 8.78 mn cts for the same month in the previous year.
Anticipating the Union Budget 2016-2017, a jewellery exporters' delegation from the GJEPC had met India’s Finance Minister Arun Jaitley in New Delhi on 27 January, to discuss a number of critical issues facing the gems and jewellery industry and gave suggestions to tackle them. But the latest Budget was a big disappointment to the Indian gem & jewellery industry. While welcoming the Union Budget 2016-17, Praveenshankar Pandya, Chairman, Gem & Jewellery Export Promotion Council accepted that there are positives in the Budget but felt that many areas in the gem & jewellery sector have not been addressed. The Gem & Jewellery Industry is dismayed at the government not paying attention to the several representations made to the Government to facilitate Ease of Doing Business in the Sector.
The Indian gem and jewellery fraternity is extremely upset with the Union Budget 2016, which has proposed to levy 1 per cent excise duty on jewellery, calling it totally unacceptable. It has also prompted the Indian Bullion and Jewellery Association (IBJA) to call for a nationwide indefinite strike starting 1 March.
As if the industry had less problems to contend with, a story of a Delhi based company advertising in Alibaba, a wholesale portal, indicating availability of lab grown diamonds in lots with GIA certification created a flurry as well. While investigations are on currently, news that GIA certificates are available for a small price in Honking and other places as well are making the rounds. Definitely a cause for concern for the global diamond industry.
To solve the problems of mixing synthetic with mined natural diamonds and other illegal activities, mining companies are doing their bit too. De Beers’ subsidiary, the International Institute of Diamond Grading and Research (IIDGR) has launched its grading service in the Far East, Middle East, India and Europe. The service, which employs De Beers’ proprietary grading technology to provide “outstanding” accuracy and consistency, was suitable for all sizes, colours, shapes and qualities.
The industry also witnessed a delegation from Rio Tinto Diamonds headed by Simon Trott, MD, at the India Diamond Trading Centre (IDTC). The Rio Tinto Diamonds MD and his team held discussions with committee members of GJEPC and BDB on the current situation and various ways in which Rio Tinto and the Indian trade could work together. The Indian diamantaires requested the mining companies, including Rio Tinto, to evolve a strategy to keep prices stable. They added that De Beers and ALROSA are working directly with India to keep stocks and price under control.
The Indian government, in a bid to curb imports of gold metal that cost the government $36 billion last year, had planned to auction at least three gold mines. Vedanta Limited, a global diversified natural resource company, has won the nation’s first-ever gold mining lease auctioned by the Chhattisgarh government. The gold mine at Baghmara in Baloda Bazar district, about 140 km north-east of Raipur, is one of the oldest explored deposit of the precious metal in Central India...
Gold has always had a niche place in the country economy for ages. According to World Gold Council, India's gold demand is likely to rise this year as investors have factored in interest rate hikes by the US Federal Reserve, while the turmoil in stock markets is making the metal attractive. Driven by dip in global prices, India's gold imports increased by 85 per cent to USD 2.91 billion last month. In January last year, gold imports were worth USD 1.57 billion. The latest edition of Gold Demand Trends (GDT) said that there was marginal growth in bar and coin demand led by China, India and the US. Investment demand grew by 8% in 2015, to 878.3t. Bar and coin demand inched up (to 263.5t) in the fourth quarter, resulting in marginal full-year growth. ETFs saw another year of outflows, although at 133.4t these were smaller than in 2014. India retained its top position in global gold consumption for the second consecutive year in 2015, registering a record high jewellery consumption at 703 tons. According to the latest GFMS Gold Survey 2015 by Thomson Reuters, India’s aggregate jewellery and investment demand in 2015 gained six per cent to 890 tons, making it the second best year of the past four years.
Despite ups and down in the Indian diamond industry, life goes on …Kiran Gems Private Limited, the world’s largest manufacturer of diamonds, has recently opened a huge polished diamond manufacturing unit in Surat. This new factory is a part of planned strategy to streamline its manufacturing units of larger diamonds. Also, the Gem & Jewellery Skill Council of India (GJSCI) signed a MOU with MSSDS (Maharashtra State Skill Development Society) on 8th February 2016, in the presence of Chief Minister of Maharashtra Devendra Fadnavis.
Not all is lost, as the Indian domestic jewellery sector is coping well and some companies still stood strong, going by their working results that were announced recently. India’s TATA group company Titan Company Ltd for instance has reported that the company achieved a revenue increase of 17 per cent year on year to US $504.6 million in the third quarter that ended December 31. Titan’s managing director Bhaskar Bhat explained in a statement that the strong result was mainly because of 20-percent growth in jewellery sales to US $415.3 million from a year ago.
Aruna Gaitonde, Editor-in-Chief of Asian Bureau, Rough & Polished
