DIAMONDS AND GEMS
How worried should India's diamond exporters be?
India's gems and jewellery export growth is likely to be flat this year given the current global economic environment, but exporters look at Christmas in the US to turn things around.
Posted: Tuesday , 16 Oct 2012
MUMBAI (Mineweb) -
Indian polished diamond exporters are a worried lot. While polished diamond exports have declined 39% year on year to $1.50 billion in September, polished diamond imports too have plunged 72% to $337 million.
Between polished imports and exports, the country's net polished exports remained constant at $1.136 billion.
According to data released by the Gems and Jewellery Export Promotion Council, polished diamond exports in September was up 6.6% as compared to August. In August 2012, exports of cut and polished diamonds declined by 41% followed by gold medallions and coins exports which dropped by 23% and coloured gemstones by 12%.
"Exports of jewellery declined 19% year on year to $3.1 billion in August. We have witnessed a massive slowdown from Western markets like the US and Europe. In August 2011, these exports stood at $3.8 billion," said the Council's executive director Sabyasachi Roy.
He added that the country's gems and jewellery exports had come down substantially, because "our diamond exports have decreased tremendously, given the 2% import duty imposed by the Indian government on cut and polished diamonds.
" Stating that the impact is expected to last till February 2013, the official said during April-August this year, India's overall gems and jewellery exports dropped about 11% to $16.1 billion. This was very low as compared to $18.2 billion in the same period last year, he added.
Despite the downtrend, the Council has not given up hope. Vipul Shah, the newly elected chairman of the Council said, the signs were positive. "Christmas season in the US should turn things around for us. The indications are already there. From then on, it could be an upward journey," he said.
At the 35th edition of the World Diamond Congress, the bi-annual meeting of the World Federation of Diamond Bourses and the International Diamond Manufacturers Association, which is currently being held in Mumbai, leaders and industry majors spoke on the issues facing the industry and how to tackle them to ensure sustainable growth.
The Congress is being hosted by the Gem and Jewellery Export Promotion Council and the Bharat Diamond Bourse (BDB).
Acknowledging the drop in exports, Anoop Mehta, president of BDB said, "A major issue facing the industry is that demand is falling. There is a lack of generic promotions globally for diamonds."
Vipul Shah of the Council noted that the Council had envisioned generic diamond promotions to propel demand for diamonds. "India is the undisputed leader in the global diamond industry. We intend to stay that way."
Added Mehta, "From 1966, India has grown rapidly to emerge as a leading centre in the world diamond industry. Exports of polished diamonds stood at $13 million in 1966-67, and by the financial year 2011-12, they have amounted to $23.25 billion.
Stating that the growth of the industry has been phenomenal not only in terms of sheer numbers but also in terms of overall development, Mehta said that generic promotion of diamonds would have helped the industry to a large extent.
Citing an example, Mehta said if De Beers' had undertaken generic promotions back in 1995 and corrected them for inflation, it would have amounted to $350-$400 million today. In comparison, Apple's annual advertising spend was pegged at $1 billion and Microsoft's at $1.6 billion. "This should give an idea about the urgent need to advertise diamonds on a global scale," he added.