Certification Picks Up With Preference For Diamonds Over Gold

Mumbai, December 22: | Updated: Dec 23 2002, 05:30am hrs
Over the past couple of years, there has been an increased preference for diamonds over gold jewellery in the domestic market. Even the export of diamonds and diamond-studded jewellery has been growing by an annual growth of around 15-20 per cent and that too increasingly of higher caratage than in the past. All this has brought forth the need for certifying the diamonds, the price of which could range anything between $500 per carat to $10,000 per carat.

Till recently, such diamonds classification / certification / grading facilities were not available in India. However, currently there are at least five such institutes / entities in India that offer diamond classification facilities to their clients both exporters and retail buyers albeit at a cost, which could prove to be prohibitive for retail buyers. The list of entities which offer diamond certification facilities for exporters include Gemological Institute of America (GIA), International Gemological Institute (IGI) and HRD of Belgium among others. Of these, GIA is represented in India by Rapaport India which acts as service agent for GIA, while HRD has its office only in Belgium. Sending ones diamonds for certification to the US or Belgium involves costs and time of around 25-30 days to get back the certified diamonds, and rejections if any.

To a certain extent, these hassles have been minimised with IGI now in India. IGI considered to be one of the top three internationally accepted diamond classifying agencies has its office in India (Mumbai) in addition to New York, Bangkok, Tokyo and Antwerp, the mecca of global diamonds trade.

There are increasing number of exporters who avail of these facilities. However, the actual percentage of such exports backed by certificates is still miniscule, said a top industry source. This is because the large portion of Indias diamond exports is of very low caratage/small diamonds which would not normally require certification. If required, the importer would do so accordingly in his homeland, the source added.

Other entities are International Gemological Laboratories (IGL); Gemological Institute of India; Indian Diamond Institute (Surat); Sindhar Gemological Institute and couple of others. However, as these entities are set up recently and that too by jewellers they have a long way to go before they are accepted in the international markets.

The demand for diamond certification has picked up only recently, said a top source at the Gems & Jewellery Export Promotion Council (GJEPC). However, in the export market, the diamonds and diamond-jewellery backed by internationally accepted agencies do have more weightage than those without, the source added.

GI managing director Tehmasp Printer said, There is a vast range of diamonds from $500 per carat to $10,000 per carat and even the pros in the industry find it difficult to differentiate a diamond between $6,000 per carat and $10,000 per carat, and it is here our services are essential.

According to Mr Printer, in highly quality conscious developed markets the retail and wholesale buyers invariably rely more on the certificates, and it would not be wrong to say that the buyers there buy the certificates than the diamonds. With the Gemological Report, an identity is created for the diamond and is termed as the passport for the gem & jewellry.

IGI claims to be the largest independent gem certification and appraisal institute in the world and is trying to promote itself as Indias first diamond certification laboratory that is not set up by jewellers and accordingly, issues unbiased report of the quality of diamonds submitted for testing.

However, in the domestic market, the hassles of logistics involved, the existence of central and state and inter-state levies and related bureaucratic problems and above all the cost of classification have all collectively forced a number of branded diamond-studded jewellery makers to issue their own certificates to their retail clients, which partially meets the psychological demand about the authenticity of the diamonds purchased.

Gitanjali Jewels managing director Shailesh Sangani said, Despite the existence of so many diamond classifying entities, there still remains a huge gap between the demand for and supply of relatively affordable and authentic services.

This is because the cost of certifying a diamond of any caratage is around Rs 3,000, which if added to the cost of diamond-studded jewellery would make the jewellery costlier for retail buyers in India.

There are too many bottlenecks in selling certified diamonds in India, Mr Sangani says and adds it would be important for the government to take initiative as it has taken for marketing authentic gold.

Since the past few years the government has been harping upon the need to buy ISIs Hallmarked gold jewellery which definitely is more authentic as regards caratage in the gold jewellery. Despite the awareness, the preference is picking up slowly, primarily because of the additional mark up that is added to the cost of jewellery which has to be bought officially and through the bill, which majority of Indians are averse to. Because of these hassles, Gitanjali Jewels - which markets its jewellery under the brand of Gili - issues its own certificate. So also, other branded diamond jewellery markets.

Interestingly, in the sparkling world of diamonds one of the most crucial issue is that of the near-correct classification and correct pricing of diamonds. While the exporting community usually settles this issue mutually among themselves, it is Rapaport, considered to be the most authentic industry information supplier through print and electronic media that has emerged as the reliable source. After the classification entities issue the classification certificate for diamonds, the prospective buyer could refer to the matrix of diamond classification and near-correct prices (that are said to be prevalent across the world) made available each week. Lastly, the awareness of diamond as an attractive alternative for jewellery buyers in India, is more attributed to the efforts of the Diamond Trading Company of De Beers. And the fruits of this media blitz is also being reaped by others in the industry.