GJEPC holds dialogue with Indian gem and jewellery industry

The Gem and Jewellery Export Promotion Council, (GJEPC) held a dialogue with leading primary sources and most prominent industry representative including DTC sightholders, Rio Tinto and other important diamantaires, to understand issues that are currently being faced by rough diamond manufacturers and chalking out solutions to the same. The meeting was held at the Council’s office in Mumbai on September 23, 2013.

Based on concerns raised by its members during informal interactions, GJEPC has recently formed a Trade Advisory Committee with prominent diamond manufacturers and exporters, to understand and develop appropriate response to the challenges faced in cutting and polishing of rough diamonds that have been recently affecting the profitability and overall growth and business prospects of the industry.

Mr. Vipul Shah, Chairman, GJEPC said, “Rising prices of roughs, currency fluctuations and limited finance options with banks having become very stringent on financing have recently had severe impact on the diamond businesses. This phenomenon has assumed critical proportions calling for austerity measures amongst the trade fraternity with the view to balance the equation between manufacturing and exports. We are hoping that by gathering inputs from the various trade and industry partners, we will be able to develop strategic solutions that will enable the diamantaires to deal with the current crisis, set out short term and long term goals and thereby steer the industry to growth and prosperity in the years ahead.”

Prominent large and medium diamond manufacturers indicated that sustained absence of profitability of cut and polished diamonds below 30 cents is of major concern. The industry has been severely affected by high rough diamond prices that are being maintained by primary producers through 2012 and 2013, liquidity pressures from rupee volatility, as well as slowdown in demand. Also, at the meeting, most manufacturers mentioned having taken the proactive approach to deal with the situation by already reducing their production over the last quarter. They expect the production over the next three months to be 30-50 percent below normally prevalent levels at this time of the year, which will help ensure the industry manages its inventory levels optimally which does not exacerbate the liquidity concerns. Manufacturers have also indicated that such voluntary production cuts might continue, and even intensify in 2014, if they do not see return of sustained profitability in polishing of rough diamonds.

The GJEPC urged all industry stakeholders to be responsible and ensure their approach is for the benefit in the long-run, one which can help the Indian industry to sustain and also grow the employment opportunities in this sector, as rough production is estimated to increase over the next three-five years. GJEPC assured trade members that the Council would monitor the situation through the Trade Advisory Committee and its members. It was felt that the current scenario did not warrant taking any further steps as yet, besides those already taken by members.