Antwerp, the diamond destination of the world, could soon face a new challenger: Mumbai.
A Finance Ministry panel headed by former revenue secretary MR Sivaraman has drawn up a blueprint to catapult Mumbai into the position of the world's diamond hub. It has also recommended a new fiscal regime for the gem and jewellery industry so that it rises up the global pecking order. The Commerce Ministry has urged Finance Minister P Chidambaram to incorporate the recommendations of the panel in the Union Budget for 2007.
India is no minnow in this sector. The diamond industry in India accounts for 80 per cent of the world’s total exports of gems and jewellery. It employs close to 10 lakh artisans and workers, both directly and indirectly. This industry is concentrated mainly in Maharashtra and Gujarat.
Minister of state for commerce Jairam Ramesh says India's position in the industry has earned it the prestigious position of Vice-Chairman of the Kimberly process with the possibility of being chairman in 2008. The Kimberly Process is a global initiative which certifies rough diamonds.
"But its exports are stunted by depending entirely on imports be it rough diamonds, gold or coloured gemstones," says Ramesh. The country now imports close to $8 billion of rough diamonds and nearly one million artisans are engaged in polishing them.
What is the way out? India is lobbying for "win-win" partnerships with African countries — offering to build their local industry through technical assistance in exchange for permission to tap its immense reserves of rough diamonds, says Ramesh. India will also provide technical assistance to African countries to ensure that they meet with the Kimberly Process certification standards.
Ramesh says he has had detailed discussions over the past three months with the ambassadors of a number of countries including Russia, Canada, Australia, South Africa, Namibia, Lesotho, Botswana, Ghana, Angola, Azerbaijan, Armenia, Uzbekistan and Venezuela. "Negotiations with Alrosa of Russia are in an advanced stage and we could expect the finalisation of a joint venture in 2007. The forthcoming visit of President Putin to India will added momentum to this process," he said.
The Gems and Jewellery Export Promotion Council (GJEPC) has also prepared the Vision-2015 roadmap for the industry. It outlines threats and opportunities in great detail. Growing competition from China, rise of new materials like palladium and steel, development of synthetic diamonds, consolidation in the world diamond industry and growth of new cost-effective cutting techniques are all possible scenarios for which India has to plan, it says.