India Halts Rough Diamond Imports for a Month

The organized Indian diamond industry decided to stop all rough diamond imports to the country for a month starting November 25, the Gems & Jewellery Export Promotion Council announced Friday. The cited reason was to send a signal to the banks that the industry will not increase indebtedness.

The move is also meant to apply pressure on diamond miners, so they will "share in the financing burden," according to GJEPC Chairman Vasant Mehta and force them to act.

Indian traders have been purchasing rough diamonds in large quantities even as prices continued to climb, yet the resulting polish diamonds was accumulated without buyers to take them off manufacturers hands.

Following is the full text of the GJEPC Friday announcement:

The Global financial situation is causing a strain on the players throughout the diamond value chain.  In order to protect the interest of the industry at large the Indian Diamond Industry has decided to curtail import of rough diamonds. This will also send signal to the banking system that the diamond industry will not increase its indebtedness at the time when our downstream colleagues continue to meet consumer demand – a demand heightened by  the inherent value which consumers attach to our product.

Therefore, The Gems & Jewellery Export Promotion Council has asked its members to cease the imports of rough diamonds for a month from November 25. Such import stoppage will help the industry face the challenge that has arisen out of turmoil in the global financial market.

Mr. Vasant Mehta, Chairman, GJEPC, observed "Our members have sufficient rough diamonds in stock to minimize the impact on our labour force". Mr. Mehta added "Our move will basically cause fewer rough to enter the diamond pipeline and the producer companies will thus indirectly share in the financing burden and contribute to a faster restoration of normalcy in an otherwise healthy business".