On the domestic front, gold of 99.9 and 99.5 per cent purity fell recently by Rs 85 each to Rs 27,565 and Rs 27,365 per 10 gm, respectively. Take advantage of this fall in gold prices and talk to us about making that dream pair of earrings, rings, or bracelets that you have been thinking about for so long.
domestic front, gold of 99.9 and 99.5 per cent purity fell by Rs 85 each
to Rs 27,565 and Rs 27,365 per 10 gm, respectively. - See more at:
Amreli, Gujarat: Raghavbhai Chengalia, 55, tiptoed barefoot on the dirt road of his farm to avoid the brown mounds of cattle dung, plucking his rolled-up gray pants even higher. Farm work is exhausting, he says, trying to hoist a bundle of cotton onto a cart. He had stopped working on the farm two decades ago when he became a diamond polisher in the town of Amreli.
Chengalia thought he had left his farm life in Mangwapar, a village about 15km from Amreli, behind for good, until his factory closed in October and took his job with it. “I have 10 people to feed at home,” he says, explaining why he cannot wait for the factory to reopen. “I have no choice but to return to work here.”
The diamond industry in Gujarat, where about 90% of the world’s diamonds are cut, polished and exported to buyers mostly in the US and Europe, is hurting from the global recession that has caused large-scale layoffs and damaged the economy of the state’s diamond processing centres. The government does not maintain employment records for the industry and it was not possible to ascertain the precise number of people thrown out of work.
India’s diamond exports were valued at Rs82,000 crore in the last fiscal. The Gems and Jewellery Export Promotion Council has reported a 31.62% decline in diamond exports since November 2007. “People have lost their jobs in the US. You can be sure that jewellery is not on the top of their mind right now,” says Vivek Mehta, a diamond expert at Suhashish Diamonds, a trading company with sales of Rs291 crore for the quarter ended June and operations in India, the US, Hong Kong and Botswana.
US retailers J.C. Penney Corp., Inc., Macy’s, Inc. and Bloomingdale’s, Inc. and Amazon.com, Inc. are offering between 30% and 75% discounts on diamonds and jewellery in a bid to attract consumers as rising joblessness deters shoppers.
However, even if these steep discounts do not drive sales, retailers in the US are unlikely to suffer because Indian exporters are paid only after the diamonds are sold, says Pravin Shah, secretary of the Mumbai Diamond Merchants Association. “So, if the retailers cannot sell the diamonds, they will simply return them to us and refuse to pay,” Shah says.
Which is why diamond exporters in India have been watching Christmas and post-Christmas sales closely. “We will get the results early next month... Only then will we know what is really going on in the international market,” says Mehta.
The downturn is, meantime, sending convulsions through manufacturing units in rural Gujarat where these diamonds are actually cut and transformed from rough stones into glittering pieces of jewellery for display in showrooms in wealthy cities of the US and Europe, says Lalit Thummar, president of the Amreli Diamond Association, who is also pursuing a postgraduate degree on the social aspects of Amreli’s diamond industry.
Ahmedabad: Diamond industry in Surat has come under the grip of global economic slowdown owing to drastic fall in orders from the US and European countries.
Global meltdown has pushed the industry in the brink of “recession” as 98% manufactured diamonds are exported to the US and European countries, a diamond industry representative said.
“We have not received orders this time as we used to during Christmas. This unprecedented slack in demand has forced us to shut our units and go for 40 days vacation,” Chairman of Gems and Jewellery Export Council and President of Gujarat Hira (diamond) Bourse, Chandrakant Sanghavi, said.
The US and the European countries are the two largest markets for cut and polished diamonds from India.
According to Sanghavi, the demand for diamonds peaks during Christmas as people in the US and European countries buy jewellery during this season. However, this time even existing orders have been cancelled owing to recession in the economies.
“US accounts for around 60% of total export of manufactured diamonds. However, due to slowdown in the market there, demand was reduced to almost half last year and the decline continues further,” former President of Surat Diamond Association, Pravin Nanavaty, said.
He added there is no sign of recovery or improvement in the market as US economy continues to remain in turmoil and there is no alternative to the US market.
Gita Piramal on how Bharat and Vijay Shah became among the biggest diamond traders in the world. (Excerpted from Business Maharajas, by Gita Piramal, 1996)
Palanpur, a parched, dusty village founded in 746, lies on the border between Gujarat and Rajasthan. Traditionally, the Jains of Palanpur -- whose surnames seem to start and end with Mehta with a handful of Shahs thrown in for good measure -- served as accountants and administrators to the nawabs of the village. As it developed into a diamond-trading centre, the experienced money-managers seized control of the lucrative business. In the '80s a combination of luck and hard work enabled the tiny community to snatch a significant portion of the global diamond trade from a group of powerful Hasidic Jews.
'It all started about twenty-five years ago,' recalls Bharat Shah. 'We went to the bottom end of the market, buying and cutting diamonds which the Jews had rejected.' Israeli and Belgium cutters sneered at the thought of carving stones under ten points or one-tenth of a carat (the Koh-I-noor, incidentally is 109 carats), but Indians were not so fussy. Purchasing modest quantities of small industrial quality roughs, Bharat and other Palanpuris handed them over to the master craftsmen of their village who turned them into sparkling gems, some so small that few can handle them without a tweezer.
In one short decade, merchants like Bharat and Vijay, college dropouts, became the world's carat czars, founding and heading India's largest private empire, a Rs 35 billion conglomerate known as B Vijaykumar (in India) and Vijaydimon (in Belgium), with interests in diamonds, construction and films. They have cutting and polishing factories in Bangkok, Antwerp, Tel Aviv, Bombay, Surat and Palanpur, employing over 22,000 workers. The head office is in Bombay, under Bharat, while the Antwerp office is looked after by Vijay.
ANTWERP, Belgium: Which Indian company has a turnover of over $1 billion, has 15,000 employees, and is rated world class? Of course, there’s the mighty Reliance. Maybe the oil monopolies. Then the troika of info-tech majors – TCS, Wipro and Infosys.
How about Rosy Blue?
Never heard of it? Most people haven’t. And strictly speaking, Rosy Blue is not an Indian firm; it’s Belgian. So are Eurostar, Vijaydimon, Gembel, and Arjav Diamonds. They are all diamond houses headquartered in Antwerp, Belgium. But they are founded and led by Indian diamantaires.
The sparkling success of Indian diamantaires is one of our lesser known sagas, although it’s been featured briefly in this column before. To realize its full dimension, one needs to visit Antwerp, where it is said God decided to rest the diamond business. Some 90 per cent of all world’s diamonds pass through this city. Now, more than half, probably two-thirds, go through Indian hands.