This is the second tenure for Vipul P Shah as Chairman of the Gem & Jewellery Export Promotion Council of India (GJEPC). During his term from October 9, 2012, to October 16, 2015, he was at the forefront to drive export demand and was successful in strengthening ties with mining companies and diamond trade bodies. Among the many important milestones, he was instrumental in organizing GJEPC’s first World Diamond Conference which was attended by Hon. Prime Minister Narendra Modi and Finance Minister Smt. Nirmala Sitharaman. At the Council level, he implemented the policy to have members on a rotation policy so that new people come on board to bring in a fresh perspective and new energy levels.
As CEO & Managing Director of Asian Star Co. Ltd., Vipul Shah has built an empire with his astuteness, focus and determination, and is a force to reckon with. A visionary with rich experience in the diamond industry, he has absolute knowledge of current business trends prevailing worldwide as well as deep insight into the future needs of the diamond market. His expertise in financial matters remains undisputed.
His broad strategic vision, business acumen and professional conduct have contributed significantly to transforming Asian Star from a manufacturing company into a value-adding, vertically integrated business partner to its clients. He has been instrumental in establishing the company’s jewellery business and global distribution network, currently one of the best in the industry. Under his dynamic leadership and able guidance, the company has attained the status of being one of India’s leading diamond companies.
Here, in an exclusive interview with Rough&Polished, Vipul Shah provides insights on the various challenges being faced by the Indian gem and jewellery industry.
What is the current situation of India's Gem & Jewellery industry? In the diamond sector, how is the polished goods export faring? In recent times, India's Rough imports have been decreasing too. Your thoughts?
The Indian gem and jewellery industry is undergoing significant growth and development, and the GJEPC is playing a crucial role in supporting this progress. By focusing on capacity building and aligning policies with future industry growth, the sector is poised for even more success in the years to come.
GJEPC continues to focus on shifting the global perception of India as a leading design centre for jewellery.
Especially in the post-covid scenario, we have noticed Indian diamond manufacturers have been producing goods to suit existing global demand, with very little appetite to maintain vast polished stocks.
The shortfall in Russian supplies due to geopolitical tensions has impacted India's rough diamond imports and consequently polished exports.
This can be observed by the fact that the category of Cut & Polished Diamonds witnessed a 10% year-on-year decline to $22.04 billion for the FY 2022-23.
Rough diamond imports for FY 2022-23 were also down 8% to $17.36 billion compared to the previous year FY 2021-22.
However, we are expecting stability would return to the diamond sector in the coming months, especially with improved conditions in China and Far East Asia.
Manufacturing and production of lab-grown diamonds (LGDs) have increased to a great extent in India of late. The government of India's support to the sector seems to be helping and providing much-needed jobs for the artisans. Do you see this growth trend of LGDs increasing, going forward?
Provisional gross export of polished LGDs between April 2022 - March 2023 grew 27.85% to $1679.98 million from $1313.98 million in the same period a year earlier.
India already has a leadership position in cutting and polishing diamonds. Recognising the emergence of the rapidly evolving LGD sector, the Union Budget 2023 announced incentives, including scrapping the import duty on LGD seeds. This reduction in import duty was a key recommendation from the GJEPC, further underscoring the Government's commitment to supporting and nurturing this important sector.
The Indian government has also provided backing in terms of a ₹243 crore R&D grant to IIT Madras to promote the sector's indigenous growth.
As of date, there are 3000+ LGD reactors in India and about 30% of the diamond polishing units in Surat process LGDs.
We expect India to soon take the leadership position in LGD production and processing as well.
Market watchers have different views...some are confident that both natural diamonds and LGDs have found their niche and will survive as two categories in the world markets. Others see LGDs going the synthetic gems route...over-production resulting in prices dipping, low demand, etc. Your opinion?
The Indian gem and jewellery sector is highly diverse and inclusive, offering a wide range of products to meet every market need. Transparency and maintaining the integrity of materials are critical to ensuring that both natural diamonds and LGDs can coexist and succeed in the market.
Pricing is largely determined by market dynamics of supply and demand among other factors.
While the natural diamond sector retains its unique allure and appeal, LGDs are rapidly gaining popularity and are here to stay and cater to consumers who seek affordability.
Ultimately, the industry's success lies in finding a balance between the two categories and offering consumers a range of options to choose from.
India is a primarily natural diamond manufacturer/exporter and is predicted to face issues, especially in its 'melee' exports ... due to 'mixing' with LGDs. Can anything be done, as honesty is not a taught 'subject'?
One cannot paint everyone in the industry with the same brush. It is unfair to generalise and implicate the entire industry for the actions of a few. Also, it would be improper to pre-empt such a negative situation.
The GJEPC has worked hard with the Government to establish separate HS Codes for the import and export of lab-grown diamonds, which was a demand from the industry itself. This has helped to monitor the two distinct pipelines and maintain their integrity.
Additionally, the GJEPC also set up the Natural Diamond Monitoring Committee in 2015 to enforce strict regulations to prevent contamination between the two categories.
As the nodal agency for KPCS, the Council is responsible for all KP certifications within the country. These measures demonstrate the industry's commitment to transparency and integrity and its willingness to take proactive steps to maintain its reputation.
With China market re-opening, how will this augur for the Indian diamond industry?
The opening up of the China market is expected to have a positive impact on the demand for gems and jewellery from India, especially diamonds. China is the world’s second-largest consumer of diamonds and one of the leading consumers of gems and jewellery.
As the US market is a major LGD consumer thanks to GenZ, do you see demand for Natural diamonds going down and thereby hitting the natural diamond demand/exports from India?
As mentioned before, the two categories serve distinct purposes and cater to different consumer needs. India is a leading producing, cutting & polishing, and exporting centre of LGDs, so increased consumer demand in the US market will lead to a further increase in exports. It’s a win-win for India.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
