Lately, the Indian diamond industry, on the whole, had been reeling with the effects of the implementation of GST and demonetization with several diamond polishers losing their jobs.
The Indian diamond trade has asked the Government for an amendment in taxation provisions to allow the sale of rough diamonds in the Special Notified Zone (SNZ) in Mumbai; and exemption of two-per cent equalization levy on rough diamond sales. According to industry members, miners could pay a ‘turnover tax’ not exceeding 0.16%, which is the prevailing rate in Belgium. Labourers are also demanding implementation of labour laws and Factory Acts in the diamond factories, claiming that around 10 polishers across the state had committed suicide in the last few months due to joblessness.
On the other hand, the Government of India has been organizing awareness programmes for the diamond industry. The Ministry of Micro, Small and Medium Enterprises of the Government of India organised an awareness programme on Lean Manufacturing Competitiveness scheme at the Surat Diamond Association recently.
As of now, with the markets opening worldwide after the COVID-19 lockdown, the gems and jewellery industry seems to be in recovery mode and exports have begun to markets in the United States, China, Hong Kong, Europe and other countries. The Indian diamond industry is optimistic about exports picking up after lockdown, as there are initial signs of recovery from markets in the US, China and Europe… and export orders have seen a steady rise over the past 4-5 months. The gems and jewellery export units are working in full swing and trade is getting back to normal recovery of exports.
The Indian diamond industry received a big supporting gesture by both the biggest miners, ALROSA and De Beers, who have been more than helpful to the Indian rough diamond importers; and thereby supporting the diamond manufacturing sector in Surat as well as other smaller sectors in the country. Both miners extended the existing long term rough supply contracts by a quarter, thus easing the financial pressure on the importers and helping in the industry diluting the stocked up inventory in the Indian industry… in both rough and polished stones.
India’s cut and polished diamond exports declined 19.60 per cent registering $ 1564 mn during Sept 2020 as against $ 1946 mn exported in Sept 2019. Rough imports during Sept 2020 increased 16.18 per cent to $ 1347.30 mn as compared to $ 1159.63 mn imported during Sept 2019.
So, to boost exports from India, the GJEPC lined up many Virtual Events during the last couple of months, including its flagship event IIJS 2020… adopting technologies to drive growth with a vengeance, if you will. The five-day jewellery extravaganza which commenced on Oct 12, 2020, concluded on Oct 16 and has been one of a kind experience for all the exhibitors and visitors. It is estimated that approximately $137 mn business was transacted at IIJS Virtual.
Commenting on the success of the show, Colin Shah, Chairman, GJEPC said, “The past five days of IIJS Virtual have been nothing short of miraculous. We have witnessed IIJS bring the industry out from a pandemic paralysis — that, too, virtually! The industry realised that one needs to change along with the time and for business sustainability, extensive usage of digital was the need of the hour.”
The first Diamond Studded Jewellery Virtual Buyer-Seller Meet organised by the GJEPC from 25 to 28 November 2020 was a hit with buyers from the UK, the USA, Europe, Australia, New Zealand and Russia participating in the event. Following this, many more VBSMs were put on the anvil.
Now, the Indian G&J industry which has seen many ups and downs and has recovered unscathed in the past is forging ahead with the same resilience. Nearly 650,000 workers in Surat have decided to forego holiday for Diwali so that they can fulfil the overseas orders for Christmas and New Year on time, as demand has begun to increase from US, UAE and many other consuming countries.
Also, diamond mining companies, ALROSA and De Beers, have also offered support to the Indian industry. ALROSA gave zero buyout obligation to its long-term customers of rough diamonds in the trading session from September 21 to 25 as well as supply contracts through the end of Q1 2021.