Need favourable EXIM policies: diamond industry

Mumbai, Sep 23 (UNI) The Indian gems and jewellery industry is labour intensive employing over one million people. As a result, India's dominance in the polishing and cutting activity is increasingly under threat from other Asian countries such as China, Srilanka and Thailand, said Yogesh Dixit, Head of SME ratings, CRISIL Ltd here.

In his presentation on Jewellery Manufacturing and Technology to members of the Federation of Indian Chambers of Commerce and Industry's(FICCI) Western Regional Council(WRC) meet today, Dixit pinpointed that China, currently processes 2.4 million carats of rough diamonds compared to India's 120 million carats a year, which translates into sale of USD 740 million a years.

Countries such as China, which have the advantage of a huge labour force, can develop the required skill sets amongst its labour. Hence, competition from China in the diamond processing and cutting business is expected to increase, as its labour productivity policies are a big attraction, said Dixit.

Drawing the attention of WRC members, he said Indians are skill based, with various stages involved in processing of diamonds that started around 35 years ago, when jewellers learnt the art of cutting and polishing diamonds from Israel.

Again, the domestic gems and jewellery industry is traditional in nature with the business being run by generations in a particular family clustered mainly in Gujarat. As compared to Isreal and Belgium, which specialise in larger, higher-quality diamonds using fully automatic diaomnd bruiting machines and other innovative automatic machinery, Dixit said.

On prices, he drew attention that Asian and South European communities, prefer to invest at least 10 per cent of their wealth in gems and jewellery as investments as they lasty long and do not wear out or depreciate.

Adding further, he said that in the past, polished dimonds have been much more volatile than gold. Due to changes in the demand and supply position of rough diamonds, it has also affected the price of polished diamonds. In addition the prices of a polished diamond is also affected by its carat weight,cut, color and clarity.

Dixit stated that colored gemstones industry centred largely in Jaipur is similar to the diamond industry, wherein oughs are sources from another country, processed and exported to third country. Apart from that, the industry also processes citrines, amethysts and garmets of all colors sourced from Zambia, Tanzania, Kenya, Brazil and Madgascar.

Through the presentation, Dixit stressed that government support in the form of EXIM policies and infrastructure such as export processing zones is the need of the hour for the industry. In addition to that Indian gem and jwellery industry must resort to aggresive marketing to consolidate further markets.

He also stated there is immense opportunity for the industry to tap the domestic markets dominated by gold. The industry must also move into processing of higher value diamonds through modern automated technology and therby diversify into cutting and polishing of other products such as colored gemstones.

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