Diamond World (DW) May - June 2020

SPECIAL REPORT
of normalcy in an otherwise healthy
business.
Just before the lockdown, the industry
saw a sharp fall in FY20 exports due
to the global slowdown. The lockdown
was announced when banks were to
review financial limits for FY21 and the
industry was hoping for relief from them.
However, the lockdown which followed
unprecedented virus attack across
globe, demanded stringent discipline by
industry players and hence, curtailment
of rough diamond imports was proposed.
This will also help improve industry
financials and release of working capital
stuck in inventories.
Speaking about the voluntary ban, Vipul
Sutariya, Director at Dharmanandan
Diamonds Pvt Ltd., said, “This voluntary
ban can protect price of diamonds. If
this is not supported, diamond prices
are likely to fall sharply. In order to
avoid this scenario, it is important that
the whole diamond industry curtails
import of roughs and also does not allow
over-flooding of market with diamond
inventory. We have to maintain a healthy
demand and supply ratio – only then the
prices of diamonds can be maintained.”
MSMEs too support the move
While the ban hopes to control diamond
prices in the long run and ensures healthy
business environment of the sector, how
will it affect the MSME units, will they be
able to meet the demand, do they really
have enough stock?
“Yes, they too have enough stock,
because there has been no demand for
the past two months at least, even if
government has relaxed norms in some
regions, a majority of diamond trade
takes place from Surat, Delhi, Mumbai,
Kolkata, and some metro cities of India
– in all of these cities the demand for
Workers have
returned to their
hometown. Hence,
diamond processing
factories are
witnessing an acute
shortage of karigars.
Since the possibility
of their immediate
return seems remote,
the voluntary
moratorium not
only should be made
compulsory but also
extended
Dinesh Lakhani,
Kiran Gems
diamonds is yet to pick up,” explains
Priyal Shankar of Shivam Jewels.
The pandemic is a global phenomenon,
so exports have been falling, in such
a case, the only solution for traders
is to control supply. The first step in
controlling supply of finished products
is to control imports of rough diamonds –
which is the core and the most expensive
raw material needed to produce polished
diamonds.
Industry has to remain unified in this
time of crisis and observe discipline
and orderliness in business. “Right
now, the retail demand for diamond
jewellery is practically non-existent.
Hence manufacturers will have to control
imports, there is no point investing a
heavy sum in the raw material – which
cannot be processed for want of adequate
labour, and lack of demand as well,”
explains Priyal.
Mid-level and small scale units will
benefit from this move, as they will be
able to sell off their inventory at a better
price, once markets open.
All in all, despite initially worries about
the effect the voluntary ban would have
had on the gems and jewellery industry –
currently, the stakeholders unanimously
agree that this ban will surely prove to be
good for the industry.
86 | may-june 2020 | DiamonD WorlD