A policy report on the gems and jewellery industry
dna has just put forth before the government a policy paper on “How to revive the gems and jewellery industry in India, and build on its employment and revenue potential”.
A copy of this report can be obtained from here (URL).
The current policy needs a re-look because of the following reasons:
1. profit margins of the diamond cutting and polishing industry have been continually squeezed by overseas mining companies. As this increase in rugh import prices cannot be met by the market which purchases the cut and polished stones, India’s margins have kept getting squeezed (see chart).
As India produces very few diamonds of its own, and also because almost all diamond mining companies are overseas, India has been compelled to import diamond roughs.
2. India is the largest cutting and polishing centre in the world, and hence commands tremendous influence in this industry. But the mining sector has now begun selling roughs directly to chain stores and to diamond beneficiation centres in other countries, thus hurting India.
3. The diamond industry has seen its workforce shrink from a peak of around 800,000 to just around 300,000 today. This could shrink further.
4. As diamonds are often set in gold and platinum jewellery, the woes of the diamond industry could spill over to the jewellery sector as well which employs around 3.5 crore people.
5. One solution would be to open up rough supply sources to others than the mining sector, which the miners do not want.
That is why the battle between conventional mined diamonds and the lab-grown diamond industry has far reaching consequences which could hurt the Indian gems and jewellery business. The report suggests measures that need to be taken to achieve two objectives:
a) to revive the gens & jewellery industry in India.
b) to ensure that India retains the technological edge of its “Make in India” vision. A recent article in “Wired” explains why lab-grown diamonds could hold one key to this challenge.
India needs the jobs. It requires nourishment for its vision. It also needs to consolidate its already formidable position in the gems and jewellery sector.
dna believes that this policy document would be of use to the government.