Mumbai: The Indian gem and jewellery industry has taken a unanimous decision to voluntarily halt the import of natural rough diamonds from 15th October to 15th December, 2023. This strategic move is aimed at addressing imbalance in demand and supply. This voluntary cessation of importing natural rough diamonds will not affect the processing and manufacturing activities within the industry. Additionally, factories in India traditionally observe a closure period of nearly two weeks during the Diwali festival in the second week of November.
In a signed letter by the respective chairmen of the trade bodies like GJEPC, BDB, MDMA, SDB and SDA, they have appealed to their members as below:
“We address you today, to update you on the current supply demand dynamics within
our industry. We are well aware of the challenges that are currently present in the
midstream; however, we remain confident in our resolve to surmount the challenges
that lie ahead of us through collective leadership.
We begin by sharing our perspective on the demand side: As you are aware,
demand for loose polished diamonds and jewellery from large consuming economies
such as USA and China have been materially affected over the last many quarters, on
the back of all time highs of 2021 & 2022, with a visible slowdown in orders. As a result,
our country’s exports have declined by 25% over the period of January till August, with
a similar trend for the month of September also. Due to such factors, our inventories
in polished diamonds have increased over the past few months and prices are softer
as an effect of this mismatch in demand vs supply.
Acknowledging some of the above factors, the GJEPC is dedicated to rejuvenating
demand in significant markets with the help of all other trade bodies, Govt. of India,
the Natural Diamond Council, the rough diamond mining companies and like-minded
bodies in USA. For example, only in the last week, a grand gala function was organised
by GJEPC in Hong Kong show to create a positive awareness around natural
diamonds. Simultaneously, we are also in exploring alternative markets such as GCC,
Vietnam, Cambodia, Myanmar, Thailand and others. We are also pleased to report
that this year, we successfully established a dedicated diamond section within the
India International Jewellery Show (IIJS), resulting in a noticeable boost in demand of
diamonds in Middle East and Indian subcontinent.
We have no doubt and remain confident that we will address and improve long term
demand in this precious and rare natural resource, but at the same time, we must
navigate the short term carefully.
From a supply perspective: We have witnessed that mining companies are regularly
selling the rough diamonds that are being mined – irrespective of the state of demand
in the midstream. They believe that the midstream is a mature segment of the pipeline
and will only purchase rough diamonds if there is real demand. In other words, they
rely on the midstream to gauge the demand for rough diamonds and are happy to
respond with corresponding levels of supply. This puts the onus on the midstream to
transmit real levels of demand by translating our need for supply of Rough Diamonds
to all mining companies.
Taking these dynamics into account, we have already reached out to all the major
Diamond Mining companies sharing with them the current short-term challenges that
are faced by the midstream and requesting them to support the industry with a prudent
and responsible approach in their offerings to their respective customer base.
Today, the situation was once again reviewed by more than 100 manufacturers,
traders, importers and exporters and office bearers of our trade associations of
Mumbai and Surat. The group unanimously was of the opinion that in order to protect
the interest of the industry, particularly the small and medium enterprises, we need to
take additional measures. It was suggested that members may be advised to halt
import of rough diamonds beginning 15th October to 15th December 2023. It was
assessed that halting imports of rough diamonds will help industry better manage the
balance between demand and supply, thereby protecting the value of assets and
increase consumer confidence.
It was also decided to review the situation in 1st Week of December, 2023 and then
decide future course of action. This appeal solely aims to voluntary halt the import of
rough diamonds, while allowing diamond manufacturing factories to continue their
operations without interruption. Additionally, we urge for measures to be taken to
support the artisans during this period, thereby ensuring that there is no adverse
impact on their livelihoods.
In view of the above, all concerned are requested by us to consider this appeal in the
larger interest of the industry and voluntarily cease import rough diamonds in India for
this specified period.
Having taken these steps, we have no doubt that we will come through these
challenging times stronger than ever, as we all believe in the longer term consumer
demand and value of this finite natural gift of love – diamonds. Let us act together in
the collective interest of the Indian Diamond industry so that we can confidently walk
towards a better season ahead.”