Even as the precious metals continue to remain at the top of the Indian consumers' preferences, diamonds are slowly picking up the pace too. Though the past few years have been encouraging for the diamond industry in the country with increased demand for its jewellery, branding has remained a major challenge, believes Tehmasp Printer, managing director, International Gemological Institute - India. In an interaction with Rutam Vora, Printer discusses about various issues including the opportunities for the diamond certification industry in India and challenges attached to it. Edited Excerpts:
How do you see the diamond market in India? What is the outlook about the demand for diamonds in the coming years?
India and China are currently among the most promising emerging diamond markets in the world. But India has an advantage of having the complete value chain of diamond including manufacturing, trading and retailing, which is not there in other countries like US or China. The demand for diamond jewellery is on the rise in India as people's perception towards diamonds is changing. Considering a dramatic increase in the demand for diamonds and diamond jewellery recently, the coming years seems to be more promising. In past six month alone, demand has risen by about 30-40 per cent. This is a healthy situation for the diamond industry. Even at the higher prices, consumers are still buying diamonds. We see the prices to further go up in coming months.
Is diamond better invest-ment instrument than gold?
Gold is a liquid investment instrument, while diamond is an investment that you can enjoy possessing. It serves the dual purpose of having made an investment as well as enjoy it. Moreover, a certified diamond will have acceptability everywhere. The certification has played a significant role in opening up the markets for diamond. Transparency and confidence are the major factors affecting diamond demand. However, over the years the level of transparency has increased with the availability of the third party independent diamond certification agencies like us. Authenticity was a concern earlier that made people shy away from buying the precious stones. But now the level of confidence is also rising among the buyers.
There is no benchmark pricing for diamonds. Do you think there is a need for one?
Of course. There is a need to have a benchmark pricing mechanism for diamonds. Currently, there is a private entity releasing diamond prices every week, but its not official. There is a need for a central organisation, which is controlled by the state and not by a private body or a company. Unlike gold, where the price variation is less for different categories, diamonds are priced in a very wide range. This also makes it a bit difficult to benchmark a price for a particular diamond.
What, according to you, are the major challenges for India's diamond industry?
India has done wonders with respect to polishing. The Indian cut diamonds have become world class now. But the industry is lacking on branding. There is a lot of unorganised retailing happening in India and consumers end up buying diamond jewellery from local traders. In such a market, a brand is stripped down. The industry is struggling hard to develop strong brands. There is hardly any Indian brand as strong as Cartier or a Mont Blanc. This could be because the consumers also are not very brand conscious about their diamond jewellery. Although, some diamond players have taken up branding exercise, but largely, branding remains a big challenge for the diamond industry in India.
How big is the diamond certification industry? Is there any difference in certification issued by separate agencies?
It is very difficult to gauge the size of the certification industry. But there are a few big global diamond certification agencies operational in India including GIA and EGL apart from IGI. But IGI commands the major share in the Indian market. The industry is growing at a robust growth of 20-25 per cent annually.
As long as differences in certifications are concerned, technically there won't be any difference. But some differences could be there in prices of the diamonds certified by different agencies.