Leaders from the Gem and Jewellery Export Promotion Council (GJEPC), the Bharat Diamond Bourse and the Mumbai Diamond Merchant Association, as well as about 250 Indian diamond exporting companies, convened for a meeting in Mumbai, India earlier this month.
The purpose of the assembly was to address the so-called “crisis” facing the country’s diamond industry, which serves as the largest diamond supplier to the Australian and New Zealand markets.
A GJEPC statement explained that “severe strain” was being placed on the sector – particularly the “mid segment of the diamond value chain” – due to diminished polished diamond demand, disparate pricing for rough and polished stones and reduced profitability resulting from the increasing costs of securing bank financing.
Considering options
One of the options tabled for consideration was an embargo on rough diamond imports – something that had not been done since November 2008, during the global financial crisis. Enforcing a ban on rough diamond imports would supposedly force the industry to focus on moving existing diamond stock, which was said to have accumulated after improvements in the economy started to take place.
However, those in attendance unanimously decided against the idea, opting to exercise “self-discipline” when importing rough and polished diamonds by keeping current stock levels and demand in mind.
The meeting outlined a number of other short and long-term measures to address current challenges, including the formation of a committee of 10 to 15 members from various Indian diamond trade bodies to organise consultations with stakeholders, such as the small diamond manufacturers in the city of Surat.
Attendees also committed to forming delegations of trade members who would meet with diamond miners to review the production situation, bankers to discuss increasing financing for the industry, and government to address policy measures. An increase in promotional efforts would also be implemented to help boost demand for diamond jewellery.
The meeting concluded with plans to reconvene in August and review the situation prior to making further decisions.
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