India's diamond industry seen adversely hit by DTC move – industry body

16 08 2010

MUMBAI (Thomson Financial) – India’s diamond industry will be adversely affected by the De Beers Diamond Trading Co’s (DTC) proposed pruning of Indian sightholders from its list clientele, said the country’s Gems and Jewellery Export Promotion Council (GJEPC).

DTC has compiled a new list which comes into force this year. This list has eliminated 25 sightholders – the clients to whom the diamond distributor sells rough diamonds. They, in turn, supply their local industries with the stones.

Those not included on the new list include eight firms in India and three Indian-owned firms in Belgium. However, six new companies have been added to the list including three from India.

GJEPC, the apex body of the gem and jewellery trade in India, added it expects some 25 pct shortage in rough diamonds after March as a result of DTC’s decision, and has asked DTC to ‘review and reconsider its decision-making process’.

DTC attributed the cut in sightholders to a global shortage of rough diamonds. However the GJEPC said that it estimates the shortfall to be no more than 10 pct of current global demand, but DTC’s cut impacts processing capacity far above this figure.

DTC India officials were not immediately available for comment.

In 2006, DTC supplied rough diamonds worth 1.7 bln usd to India out of a total of 8 bln usd worth of diamond imports.

GJEPC chairman Sanjay Kothari told reporters in Mumbai that India will have to develop sourcing from alternative rough diamond suppliers and asked the Indian government to encourage local mining.

‘This move by DTC will consolidate the business in a few hands only, as small and medium enterprises dependent for rough diamond supplies through intra-day dealings with sightholders will discontinue,’ the GJEPC said in a statement.

According to its estimates, around 150,000 diamond workers will be jobless owing to the combined factors of a shortage of rough diamonds and a drop in export revenues linked to the weakening of the US dollar against the Indian rupee.

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