The Gems & Jewellery Export Promotion Council has forecast 20 per cent growth this year, the same as the all-time high of 2007-08, with a further 25-30 per cent boost next year due to economic recovery in the US and growing Indian consumption. Chairman Rajiv Jain outlines obstacles in this growth path in an interview with Dilip Kumar Jha. Edited excerpts :
What is the impact of the near-ban on export of colour gemstones from Tanzania?
Severe, with escalating fear of rendering a 40,000-strong skilled workforce jobless. Owing to differences in skill sets, these workers cannot be used for cutting and polishing of other stones like diamonds, emeralds and rubies. Since around 90 per cent roughs mined globally are cut and polished in India, the Tanzanian government’s ban on export of over one carat colour gemstones has not only dramatically reduced the processing work but also swelled stockpiles in Tanzania. Almost all gemstones are over one carat. Tanzania’s colour gemstone exports are Rs 300-400 crore annually.
How does GJEPC plan to address the problem?
GJEPC plans to apprise the Union minister of commerce next week, who in turn will speak to the Indian high commissioner there to take up the issue. The government of Tanzania wants importers of roughs to participate in mining and beneficiation activities, which is not possible. We prefer to concentrate on imports of rough colour gemstones. Since Tanzanian miners also want rollover of money, they cannot hold stocks for long. Hence, we are confident that the governments of both the countries will soon sort out the problem amicably.
Since the Kimberley certification process is through, do you expect imports of rough diamond from Zimbabwe to resume in the near future?
Yes. Two consignments worth $180 million held up in Dubai for months will hit Indian ports within a week. Imports were halted after smooth arrivals in two months (September-October) last year. The process of certification for foreign trade has begun again.
European countries continue to remain under stress. Do you see this as an opportunity for Indian diamontaires to acquire dominant technology and retail chains in Europe for future growth?
That has already started. A Jaipur-based company has already acquired a company in Europe to bring technology to India. This means consolidation in the jewellery sector has already begun. I am sure many Indian companies will be looking to acquire more European companies at the current low valuations.
The government gave you half-hearted relief in the last Budget. What are your expectations from the coming one?
We want the government to provide a level-playing field for survival of this labour-intensive industry. Today, working capital is available at 11-12 per cent, which we have urged the government to bring down to five-six per cent. Second, gold finance is available at two per cent in competing countries, as against 11-12 per cent in India. This should be facilitated. Most important, the government must ease norms in the form of relief in turnover tax, etc, for global players like De Beers and Rio Tinto to make India a major diamond trading hub like Hong Kong, Israel and Botswana.
