SourcingMar 15, 2023
Amid Uncertainties, India’s Diamond Industry Continues to Adjust SourcingMar 15, 2023
Q&A: GJEPC Chairman Vipul Shah
Shah talks with National Jeweler about diamond demand, lab-grown, and why it’s difficult to make predictions about the U.S. market.
Vipul Shah is the chairman of India’s Gem & Jewellery Export Promotion Council.
Mumbai—As Q1 2023 enters its final weeks, there is a growing optimism in India’s diamond industry.
The positive indications emerging from the Far East market at the just-concluded Hong Kong show, coupled with some early signs that demand in the U.S. may stage a recovery, are driving this sentiment.
The apex body that helmed the Indian gem and jewelry industry’s rise to global prominence, the Gem & Jewellery Export Promotion Council (GJEPC), is also on an upswing.
Its membership has just crossed 9,000, a full 38 percent above 2021 membership.
Last month the organization unveiled plans to expand its flagship show, IIJS Premiere, making it the second largest gem and jewelry trade event globally, with 1,850 exhibitors across 3,250 booths split between two world-class venues.
National Jeweler caught up with GJEPC Chairman Vipul Shah to talk about overall demand, lab-grown diamonds, and the impact the war in Ukraine is having on India’s diamond industry.
Q: Exports of polished diamonds from India have slowed over the past few months. What are the factors behind this?
A: Global uncertainty hit consumer sentiment in the U.S. and Europe, and China remained closed for a long time. So, during April 2022 to January 2023, Indian cut and polished diamond exports witnessed a 10 percent decline.
Diamond manufacturing was also impacted by rough supply being erratic, irregular and undependable. Prices of Russian rough diamonds are steep, and dealers are facing hurdles as they are not able to send payments smoothly due to the U.S. sanctions.
The war has severely impacted everyone globally with high inflation, high interest rates, high cost of holding inventory, etc., in the last eight months.
Q: Has this slowdown been uniform across all categories of polished?
A: No, it differs across the three basic categories of polished.
The demand for 20 pointers and below is strong and stable due to the shortage of rough, as supply has declined over the last one and a half years. Prices are stable, though slightly on the higher side. However, supply of rough from Alrosa is unstable, with a month of supply followed by one to two months of no supply.
[Demand in] the 20-50 points category has started to pick up very recently, mainly driven by Chinese demand following the lifting of lockdowns. Gold jewelry sales were high during the Chinese New Year, and diamond jewelry is the next major category both in China and other southeast Asian markets.
Fancy shapes like pear, oval, marquise, etc., have performed well across the board.
In the 1-carat-plus round category, however, there has been a significant decline in demand as a large portion of these goods are exported to the U.S.A., which has underperformed in the last six to eight months due to the American economic slowdown, inflation, recession, etc.
Moreover, lab-grown diamonds have taken over about a third of the large-stone engagement ring market share in the U.S. market.
Q: What has been the impact of the rise of lab-grown diamonds on India’s diamond business?
A: The impact of lab-grown diamonds on small diamonds is not as significant as it has been for larger diamonds. In smaller sizes, the price differential between natural and lab-grown diamonds is not significant. Additionally, the labor required to polish either type of smalls is similar, further reducing the price differential.
In larger sizes of 1 carat and above, the price differential between the two is significant, around 30-40x. For instance, if a lab-grown diamond costs $2, its natural equivalent stone will be priced at $60. This impacts the market greatly especially at a time when the economy is facing challenges such as inflation, recession, and other related issues.
Q: What are GJEPC’s plans for further development in this context?
A: India’s gem and jewelry industry contributes $40 billion in export income, which is about 10 percent of the country’s merchandise exports. GJEPC aims to increase this to $75 billion over next five years.
The diamond sector accounts for more than 60 percent of exports and will continue to be a key segment.
The country is also emerging as the fastest-growing jewelry manufacturing center both for plain gold and studded jewelry. The recent free trade agreements—India-UAE CEPA and India-Australia ECTA—have provided impetus to the sector and boosted jewelry exports to these markets. Bilateral trade agreements with other nations are expected to provide a further fillip.
Our industry is also focusing on developing the manufacturing infrastructure in the country.
India’s largest jewelry park is coming up in Mumbai, and hi-tech Common Facility Centres (CFC) and a Mega CFC in Seepz will enhance quality of the product. A gem bourse is also coming up in Jaipur.
Additionally, GJEPC holds three popular trade shows, IIJS Premiere, IIJS Signature and IIJS Tritiya; organizes India Pavilions global exhibitions; and conducts product-specific and market-specific buyer-seller meets and India Global Connect e-meetings to introduce Indian exporters to potential buyers worldwide.
Moreover, we are focusing on responding to increasing consumer interest in traceable, responsibly sourced diamonds, supply chain transparency, sustainability, and ethical practices.
Q: So, what are your expectations for the rest of 2023?
A: The opening up of markets in China and Southeast Asia is a good thing and we anticipate no further drop in exports. In fact, we expect some positive signs from the Far East over the next six months.
In Southeast Asian countries such as Vietnam, Cambodia, Thailand, Indonesia and others, there is a lot of new money. The economies have performed well and are potential new markets. Vietnam or Cambodia can even be likened to the China of 20 years ago!
There are also expectations the U.S. market will recover from the economic slowdown of the last few months. Consumer confidence is also expected to improve. This could lead to a rebound in demand for luxury goods, including diamonds and jewelry.
However, one cannot underestimate the impact of external factors such as inflation, interest rates, and global economic conditions. Currently, therefore, it is difficult to make an accurate prediction for the U.S.
Related stories will be right here …
More on Sourcing
The Latest
CrimeDec 03, 2024
Man Sentenced to Life in Prison for Murder of Florida JewelerJohn Willard Craiger, 83, fatally shot jeweler Ghazi “Gus” Michel Osta following an argument in the store.
ColumnistsDec 03, 2024
Peter Smith: How a Leadership Hire Can Make or Break a CompanyIn his latest column, Smith provides a list of questions every business needs to be asking their next potential leader.
WatchesDec 03, 2024
Jaeger-LeCoultre and Vacheron Constantin Appoint New CEOsJérôme Lambert returns as CEO of Jaeger-LeCoultre, while Laurent Perves takes the lead role at Vacheron Constantin.
Brought to you by
Protecting Your Sparkle: Why Screening Has Become Essential While no reputable jeweler would knowingly sell lab-grown stones as natural, it's a growing possibility.
MajorsDec 03, 2024
Neiman Marcus’ ‘Fantasy Gifts’ Sparkle In Pavé This Holiday SeasonThe extravagant gifts in this year’s “A Neiman’s Fantasy” Holiday Book range from a Messika diamond necklace to pavé diamond cowboy boots.
Weekly QuizNov 26, 2024
This Week’s QuizTest your jewelry news knowledge by answering these questions.
IndependentsDec 02, 2024
Windsor Jewelry Closing After 105 YearsOwners Greg and Lynn Bires are heading into retirement.
GradingDec 02, 2024
Jewelry Appraiser Craig Lynch Dies at 70The industry veteran is remembered for his faith, his dedication to his family, his wealth of knowledge and his generosity in sharing it.
Brought to you by
Navigating Cybersecurity: Essential Guidance for JewelersFrom protecting customer data to safeguarding inventory records, it's crucial to learn how to tackle cybersecurity challenges.
SurveysDec 02, 2024
10-Year Rewind: Comparing 2024 Holiday Shoppers With the Consumers of 2015PricewaterhouseCoopers’ 2024 holiday trends survey took a 10-year look back to see what mattered to consumers then versus now.
Lab-GrownDec 02, 2024
Lab-Grown Diamond Jewelry Set Sells for $55K at Charity AuctionMonique Lhuillier and Kay Jewelers collaborated to create the pieces, which were offered at the recent Baby2Baby gala.
Policies & IssuesNov 27, 2024
G7 Announces Botswana as Second Verification ‘Node’ for Rough DiamondsBotswana joins Antwerp as a certification center for rough under the G7 ban on Russian diamonds.
CollectionsNov 27, 2024
Piece of the Week: Mignon Faget’s ‘Crescent Starry Night’ Tassel EarringsMignon Faget honors its hometown of New Orleans with a piece inspired by “The Crescent City.”
TechnologyNov 27, 2024
Nivoda Secures Additional Funding The London-based business-to-business diamond and gemstone marketplace just closed on a $51 million round of Series C funding.
SourcingNov 26, 2024
De Beers Stays With ‘A Diamond Is Forever’ for 2024 Holiday Campaign“Forever Present” highlights gifting opportunities for natural diamonds, celebrating familial, friendship, and romantic relationships.
AuctionsNov 26, 2024
Christie’s To Auction Collection of Suzanne Belperron JewelsIt’s one of the most impressive assemblages of the French designer’s pieces ever to come to auction, Christie’s said.
ColumnistsNov 26, 2024
The Smart Lab: 7 Strategies for Refining Your Holiday Email Marketing CampaignsSuccessful email marketing campaigns are all about timing, personalization, and compelling CTAs, Emmanuel Raheb writes.
MajorsNov 26, 2024
GIA’s Board of Governors Adds 2 New MembersRetail leader Lisa Bridge and geology professor Dr. Wendy Bohrson joined the organization’s board.
MajorsNov 26, 2024
Ben Bridge Jeweler Unveils This Year’s ‘Benny Bear’ Look out for a black bear wearing a purple Santa hat and its zippered tummy pouch made for holding a holiday gift from Ben Bridge Jeweler.
SourcingNov 25, 2024
William Goldberg Celebrates 2 Major Milestones With New Book“The William Goldberg Way” was released in honor of the company’s 75th anniversary and 25 years of its proprietary Ashoka diamond.
Lab-GrownNov 25, 2024
Lab-Grown Co. Lusix Sold to 2 Companies for $4M Fenix and Dholakia Lab-Grown Diamonds have jointly acquired the Israel-based company, which grows diamonds using solar power.
IndependentsNov 25, 2024
Sophie Bille Brahe Opens First US StoreThe Danish brand has opened an appointment-only location on Madison Avenue in New York City.
Events & AwardsNov 25, 2024
The Original Miami Beach Antique Show Panel to Feature Fred SavageThe actor and watch enthusiast will be part of the show’s education lineup.
EditorsNov 22, 2024
Out & About: Inside the CD Peacock MansionStep inside the nearly 21,000-square-foot suburban Chicago jewelry store with Editor-in-Chief Michelle Graff.
CollectionsNov 22, 2024
Piece of the Week: Xander Jane’s ‘Spiked’ Pearl StudsThese punk-inspired earrings from the new Canadian brand’s debut collection reveal the alter ego of the classic pearl.
SourcingNov 22, 2024
Facets of Fire Expands to Include Pear, Marquise DiamondsThe company brings its nanotechnology to two new fancy cuts for diamonds that feature its signature color and brilliance.
Supplier BulletinNov 21, 2024
Tasha R Releases 2025 Labbelle Lab Diamond Jewelry CatalogSponsored by Tasha R
AuctionsNov 21, 2024
Gold Watch Gifted to Titanic Rescue Ship Captain Sells for $2MThree Titanic survivors presented him with the personalized Tiffany & Co. timepiece about a year after the tragedy.
