Diamonds are forever?

Indian exporters must graduate into higher-end gems

With well over $6bn in the kitty, India continues to be the largest exporter of cut and polished diamonds. Indeed, there is no immediate threat to this pre-eminent position, but that should not lead to complacency. Diamonds may be forever, but there is no guarantee that India can hold on to the status forever. India’s forte is in the small category roughs, or what are called ‘cheap goods’. This is an area where Indians are the undisputed masters — no other country has same skills. But that is India’s strength and weakness at the same time. Strength, because over the years it has been possible for Indian diamond exporters to cast their net far and wide; and weakness, because Indian exporters seem to feel that after having spent four decades in the industry routinely cutting and polishing small diamonds, India may not be in a position to move over to the higher end of the spectrum. This is fraught with the dangers of resistance usually associated with over-dependence. There are sporadic reports that suggest that China and other neighbouring countries are also seriously toying with the idea of entrenching themselves in this lucrative field. There is no saying that India will not lose, over time, its hold in a field now considered a virtual monopoly.

Real value addition comes from bigger stones and gold and studded jewellery. A few industry leaders have indeed diversified into the field, but they also tend to go by the dictum ‘‘small is beautiful’’. If they really want to make a mark in the high streets of fashion, and add more dollars to the coffers in the bargain, it is time Indian diamond exporters took a second look at their performance. It is all very well to cling on to the time-tested but crude indigenous methods of cutting and polishing. But a leader ought to also keep pace with changing times and tastes so that there is no real or perceived threat to its positioning in the international market. This is particularly so when the market for small diamonds is reportedly getting saturated. In this context, the commerce ministry’s appeal to the Gem and Jewellery Council to diversify and scout for new markets calls for a serious response.