Mumbai diamond market was slow during the month of June as the industry is going through the lean period with low demand from overseas as well as domestic sector. In light of global market conditions, diamond miners have also reduced rough prices and it is predicted that the market will improve and this year’s buying seasons would be better.
Back home in India, preparations for IIJS 2015 have already begun in the manufacturing sectors of both loose stones as well as the jewellery. So, demand for loose stones is bound to pick up in the coming weeks and months.
But the performance statistics announced by the Gem & Jewellery Export Promotion Council (GJEPC) of India was a repeat of the previous months, with exports declining again. India’s cut and polished exports for May’15 declined by 9.34 percent recording $1742.30 million (2.59 million carats) as against $1921.75 million (2.87 million carats) during May ’14. Rough exports showed a decline of 17.43 percent registering $ 117.68 million (2.25 million carats) for May ’15 as against $142.53 million (2.92 million carats) for May.14. Rough imports recorded $1322.62 million (11.11 million carats) for May ’15 from $1538.73 million (12.13 million carats) indicates a decrease of 14.04 percent. Polished diamond imports recorded $195.48 million for May ‘15 as against $425.27 million for May ‘14.
To add to the diamond cutting sector’s woes of liquidity crunch, low profits, high rough prices etc., this year’s monsoon floods damaged diamond polishing units in Gujarat, bringing untold misery to the unit owners in many areas. Amreli, which is one of the biggest centres for polishing low-value diamonds after Surat with majority of diamond cutting units located in places like Bagasara, were all inundated by flood waters recently. Most of these small units are engaged in job work for Surat diamond manufacturers. Severe damages were reported to life and property but the exact figures are yet to be confirmed.
However, the month of June was eventful for the diamond Industry as the Government of India’s announcement to permit the trading of rough diamonds in India by leading diamond mining companies of the world by creating a 'Special Notified Zone ' had just come as a blessing sometime during May end. The CBEC, the national agency responsible for administering Customs, Central Excise & Service Tax in India had decided to introduce necessary provisions to allow and facilitate viewing, auction, sale of rough diamonds at Bharat Diamond Bourse, Mumbai with effect from 1.7.2015, bringing much cheer to the Industry players. India, which currently processes nearly 14 out of 15 rough diamonds, already enjoys dominance over the diamond manufacturing industry. The introduction of the Special Notified Zone (SNZ) will provide India a platform from where it could establish its position as a global diamond trading hub in near future.
In addition, the Ministry of Commerce & Industry of the Indian Government gave its approval to the plan for the development of Common Facility Centres (CFCs) for diamond manufacturing in numerous cities and towns across Gujarat. The government’s plan to provide around $8 million for the project was well received by the Indian industry. The CFC scheme was proposed to benefit small & medium diamond manufacturing units located in towns and interior villages. The GJEPC has been designated as the nodal agency for the scheme and has constituted a Project Steering committee, which will soon finalise plans for implementation of the first phase.
Meanwhile, Surat which was under the scanner after huge amount of undisclosed mixing of synthetic diamonds in the natural diamond parcels were detected from Mumbai, Surat and other parts of the world including Belgium, Israel and Dubai in the last two years was vindicated when the Diamond Detection and Resource Centre (DDRC), opened by the Gems and Jewellery Export Promotion Council (GJEPC) at the Indian Diamond Institute (IDI) in Surat, screened over 10,000 stars and melee diamonds (smalls) in the last one-and-a-half-months using the state-of-the-art Automated Melee Screening (AMS) and other vital equipments, and did not find a single synthetic diamond.
Indian diamond industry has always been pro-technology and companies have been quick to absorb the most sophisticated technology from across the world into its manufacturing and other areas of business. Indian company, Dharmanandan Diamonds has introduced a frictionless instant messaging help-guide on WhatsApp. The instant messaging service assists clients with what they need to know about the diamonds in inventory. For instance, a client may require information on a diamond they seek and using the WhatsApp tool, the information will be provided with an image or video of that particular diamond right away. The company’s jewellery unit Eon Jewellery has also introduced a number of innovative and customer-friendly features like 360 degree videos and images of the designs, free professional Digital Image Catalogue and a Quotation Management System (QMS).
Media reports of defaulting companies have been making the rounds in the Indian diamond sector and one such has been out in Surat as early as last week, when two diamond companies defaulted on payments to rough diamond dealers in Mumbai, Surat and Antwerp, according to unconfirmed reports.
The domestic jewellery market is rather slow as it is lean period with no major festivals until the month of August. However, looks like Indian jewellery lovers have turned to platinum jewellery of late, as platinum jewellery sales have surged higher by 30% over the previous year outpacing gold during the initial two months of the current fiscal year. The strong growth in sales was primarily driven by sharp plunge in platinum prices relative to gold and growing demand for bridal jewellery and chains. The buying patterns of Indian customer have changed in recent years, showing that platinum jewellery has gained prominence. The men’s jewellery segment especially has witnessed considerable growth.
In recent months, Indian expats have been complaining about ‘harassment’ by customs officials at Indian airports, saying they are forced to pay heavy duties or asked to leave the jewellery behind in lockers. The Indian Consulate in Dubai has urged expats to follow due procedure and get export certificates before exiting home country. Indian expats can easily travel in and out of India with gold jewellery if they follow due procedure. Duty is chargeable only on gold jewellery purchased outside India and if it exceeds the free allowance. Free allowance is applicable only to pure gold jewellery and not jewellery studded with stones. Bullion up to 1kg per person can be imported into India by paying duty of around 10 per cent.
Aruna Gaitonde, Editor in Chief of Indian Bureau, Rough & Polished
