As Mail Today reports, diamonds have been offering consistent returns compared with other assets, such as gold and real estate, but there are very few takers for the precious stones as an investment option in India, according to www.diamonds.net.
Mehul Choksi, chairman of Gitanjali Group, said that though people prefer to buy diamond-studded jewelry, there are few who prefer to buy solitaires. "There are lots of reasons for that. First, there are around 27,000 varieties of diamonds with very little standardization. It is not true that diamonds won't find buyers for its resale value, as even the cheapest or most rejected of diamonds has witnessed at least 50 percent appreciation over a period of time," he said.
According to the data provided by the Federation of Indian Chambers of Commerce and Industry (FICCI), the value of diamonds has appreciated, on average, by around 125 percent between 1995 and 2008.
Bina Goenka, founder and head of jewelry designer and retailer Bina Goenka Luxury Group, said the Rapaport Group has been trying to come out with the diamond pricing, but there is a need for a lot more transparency.
"Transparency in the pricing of rough and polished diamonds, coupled with the creation of limited benchmark varieties of solitaire, can easily make consumers accept the instrument as an investment tool for wider portfolio diversification," she said.
According to Mordy Rapaport, the managing director of Rapaport Group, to promote trading and investments in diamonds, there is a need to get in a few varieties of solitaires with international pricing.
"The pricing of the same would be available freely and it would be a standard product. There would be transparency in the pricing but there would be a need to educate people," he said.
He said that in the solitaire segment, trading is currently being done and prices are available, but it is being done primarily at the business-to-business (B2B) end.
Prasad Kapre, co-chairman of the federation's gems and jewelry committee, said once pricing becomes transparent, there will be a big impact on the margins of diamond traders. "But this cannot be helped. Transparent pricing would also boost investments in the sector," he said.
"Today, diamond jewelry is considered one of the best options for financial security ,but not as an investment option due to the lack of transparency in the pricing of rough and polished diamonds," he added.
