INDIA'S RICH TRADITION IN DIAMONDS

 

India’s tradition in diamonds extends over 2000 years. India was the only source of diamonds until diamond deposits were discovered in Brazil in 1760. One could trace world famous diamonds (such as the Kohinoor) to Golconda, Panna and other  mines in India. This bears testimony to the country's age-old history in diamonds. Even the science of gemmology developed in India as early as the beginning of the first century. "Ratnapariksha" written in the first century AD describes the syllabi for teaching, testing and valuation of precious stones and diamonds. "Bharat Samhita" written by Varahamihir and "Arthashashtra" by Kautilya provide further testimony to India's tradition in diamonds and jewellery. The diamond industry was at its pinnacle in India between the 6th and 17th centuries. With the drying up of diamond deposits, the Indian diamond industry dwindled to a negligible size.

 

With the beginning of the import of rough diamonds for export production in the early 1960s, the Indian diamond industry experienced revival and resurgence. Within a few decades, diamond exports surpassed the expectations of the industry watchers. India today occupies the No. 1 position in importing, processing and exporting diamonds. As already stated, over 70% of the world exports of cut and polished diamonds in caratage are processed in India. The diamond industry claims that roughly 7 out of every 10 diamonds set in jewellery worldwide are processed and exported from India.

 

FEATURES OF INDIAN DIAMOND INDUSTRY

Diamond is an 'export-led' and 'value added' industry. The industry depends entirely on imported raw material, namely, rough diamonds, generally referred to in trade parlance as “roughs”. The diamond exporters have developed a global outlook, as theirs is an export-oriented and import-dependent industry. In order to excel, they have to overcome necessarily competition from manufacturing and cutting centres in other countries.

 

Value addition takes place in the process of cutting and polishing. The objective of cutting and polishing is to remove the impurities and to impart the desired geometrical shape and surface finish such that the light entering the diamond is fully reflected back to the eyes of the viewer. Technologically and skill-wise, India is well equipped to face global competition.

 

Every diamond is different and every diamond deal is different. Purchase or sale of diamonds, whether roughs or cut and polished, involves sub-optimal decisions, i.e., decisions made without all the relevant information. Therefore, purchase decisions carry an inherent risk. It is because of the vagaries and uncertainties involved that the trade, more particularly where smaller sizes (below 0.25 carat) and promotional goods or commercial grades are concerned, has adopted the unit weight, namely, carat as the accounting unit for the purposes of stock accounting, pricing, purchases and sales. All transactions are conducted in terms of carat. A carat is equal to one-fifth of a gram or 200 milligrams.

 

Of the total world exports of 27.25 million carats of cut and polished diamonds, India dominated with 19.21 million  carats in  1995-96.  In terms of value, India with an export of  US$ 4.7 billion accounted for 43% of the world diamond exports of US$ 10.8 billion in 1995-96. The share in value terms has risen  to 50%  in 1998-99.

 

ACKNOWLEDGEMENTS:         

FINANCEMAN ASSOCIATES acknowledges the use of various printed and electronic media for compiling the content, ideas and statistics on the gems and jewellery industry presented on this web page. We at FINANCEMAN ASSOCIATES are thankful to the industry leaders, their spokesmen, commentators in the media and experts in diamonds processing and jewellery manufacture and, specifically the Gem & Jewellery Export Promotion Council, Mumbai, for the use of published text and statistics that are in the public domain. The place of jurisdiction concerning all issues presented on this Web Page by FINANCEMAN ASSOCIATES shall be Mumbai, Maharashtra, India.

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