Heading into an Indian Summer

The two major impediments to an even faster industry growth in India have always been:

• The protective and cumbersome government policies and bureaucracy.
• The lack of an organized and efficient, trading structure.

On both of these issues, the future of the Indian diamond industry seems bright. Although it will not be easy to conduct diamond business in Mumbai in the next few months, the diamond trade is slated to move into the Bharat Diamond Bourse, which has been erected at a cost of $225 million.

The Bharat Bourse complex covers 18 ha (2 million square feet). About 50,000 people are expected to move there from offices and factories in the Opera House area. Many find this transfer hard to imagine but, as the customs offices will move to the complex, the trade will have “almost no choice but to follow,” explains Kaushik Mehta, vice president of the Bharat Diamond Bourse and a former head of the Gem & Jewellery Export Council.

Also, despite the current problems in the consumer markets, there is clear evidence that the rate of growth of the ‘cheaper diamonds’ in the consumer markets (and not only in the U.S.) seems to be much higher than the growth rate of the more expensive gem qualities. Here, too, the future looks most promising for India, which will undoubtedly continue to consolidate its leading position in the world diamond industry in the years ahead.

Because of the cost advantages, at the end of the day, the niche of manufacturing smaller goods will always remain in India. Nowhere else in the world can one find a diamond industry that can be confident of having continued access to cheap labor (presently around $115 per month for polishers; about $227 per month for sorters).

At the end of the day, India is the place where the diamond story began and it is the place where diamonds will be, as long as there are diamonds.  

We would like to thank Jewelbiz Magazine for their kind assistance in providing images for this chapter.