Monday, April 25, 2005

Curried Diamonds


India threatens to dim Antwerp's glitter
By Indrajit Basu

KOLKATA - The winds of change are sweeping across the global rough-diamond industry, a segment that lies at the core of a pulsating US$100 billion-plus jewelry industry. India, considered a rookie in the world of diamond processing until recently, is fast emerging as the epicenter of activity in this regard, and, much to the disbelief of many, is even threatening the global pre-eminence of Antwerp.

According to Hoge Raad Voor Diamant - HRD, or the Diamond Council of Belgium - diamond processing has completely moved away from the Belgian city of Antwerp to Surat in India, "which is the new epicenter", going by the volume of diamonds processed and the number of people involved.

HRD says Surat employs anywhere from 750,000 to 1 million cutters and polishers, who last year processed diamonds worth about $9 billion, an amount which represents approximately 90% of the global production figure. In comparison, Antwerp, which claims to command more than 50% of the world consumption of rough, polished and industrial diamonds, has just about 30,000 diamond processors employed by 1,500 global firms.

"This is a very significant development, and underlines the position of India as both a diamond market and an industrial center," said Peter Meeus, managing director of the HRD. He added that "India is developing into one of the largest jewel and diamond markets in the world".

Antwerp once employed tens of thousands of diamond processors and has commanded the most prominent position in the global diamond trade for centuries. "However, owing to increasing wages and due to the shortage of availability of skilled processors, this number has reduced to about 30,000 distributed across about 1,500 small companies," said Youri Steverlynck, the spokesperson of HRD.

Industry players say this recognition augurs well for India. Having played a marginal role for years - ever since 1960, when India made an entry into diamond processing - Indian jewelry makers are striving hard for a more meaningful role in the global jewelry trade. The next aim then is to reach for the skies; well almost. "Having achieved a predominant position in exporting polished diamonds, our aim is to make India a one-stop shop for jewelry," said Kothari.

And although the dream of becoming a one-stop shop "may appear as wishful thinking to the global jewelry trade", India is already emerging as a preferred sourcing destination for global jewelry marketers, said Kothari. "This is evident from the influx of the retail giants like Wal-Mart, Sears, JCPenny and Ratners that have increasingly hiked their sourcing from Indian manufacturers," he said.
"India in fact can do much more than what Italy, China, Hong Kong and Thailand are doing in the world jewelry market," added the council's ex-chairman, but skeptics say that despite its dominate position in diamond processing, its global jewelry dreams could be stymied by hurdles. To do that, claim sources from the Belgian Association of Polished Diamond Traders, India has to break into a market dominated by America, Israel and China, which is also trying to catch up. If India hopes to lead the market in diamonds, it has to upgrade fast.

There's another problem, said Kothari. "There is considerable shortage of rough diamonds and skilled labor force for jewelry making is also getting scarce," he said. "This is because over the past few years, there is considerable increase in manufacturing capacities not just in India but even in the rough diamond supplying countries which has resulted in more manufacturing capacities than the supply of roughs can meet."

Asia Times Online :: South Asia news, business and economy from India and Pakistan


At 4/27/2005 09:57:00 AM, Anonymous Cristobal said...

This combined with a serious comercialization of synthetic diamonds will cause the price of diamonds to plummet I predict.


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