Diamond World (DW) May - June 2020

SPECIAL REPORT
government’s go-ahead. The lockdown,
has rendered thousands of workers
jobless and forced them to return to their
native places.
As a solution and to protect the interests
of the industry during this crisis, it was
suggested by the GJEPC that individual
members consider the option of curtailing
imports of rough diamonds from May 15.
India has a monopoly in cutting and
polishing diamonds, with 14 out of 15
stones in the world being processed here.
However, the industry is now seeking to
cutback domestic inventories and also
import of rough diamonds.
Recently, several companies that
get diamonds processed and export
the polished stones, made some
representations to the GJEPC. The
Council responded to their call and also
discussed possible steps to strengthen
the Indian diamond industry.
“Such a curtailment of imports will help
the industry face the challenges arising
out of the drop in demand in the global
gems and jewellery market,” explained
Vipul Shah. However, it left the decision
to individual importers.
This move will send a signal to the
banks that the diamond industry will not
increase its indebtedness at a this crucial
time. This, they hope will reassure
bankers and prompt them not to reduce
credit exposure to the industry.
IMPORT VALUE
Quantity (in million carats)
200
150
100
50
0
Source: GJPEC
16.8
146.2
14.0
17.1
Diamond industry is financially
sound
The Indian industry’s total indebtedness
to banks is not excessively high—it
currently stands at around $9.5 billion.
The industry has honoured a major
portion of its debts to the banks, and if
the diamond sector tides over the next
three months, the situation should be
under control. It is expected that demand
will be restored by 2021.
According to the council, another
aspect of the move to curtail import is
that, it will allow fewer rough diamonds
to enter the pipeline and the producer
companies will face lesser strain and
indirectly share in the financing burden,
thus contributing to a faster restoration
18.9
15.7
- value (in $billion)
12.7
138.4 153.3 187.7 165.0 146.4
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20#
20
15
10
5
0
#provisional
MSME units too have
enough stock, because
there has been no
demand for the past
two months at least,
even if government
has relaxed norms
in some regions, a
majority of diamond
trade takes place from
Surat, Delhi, Mumbai,
Kolkata, and some
metro cities of India –
in all of these cities the
demand for diamonds
is yet to pick up
Priyal Shankar,
Shivam Jewels
DiamonD WorlD | may-june 2020 | 85