GJEPC concerned over pruning of Indian sightholders

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With DTC deciding to prune eight Indian sightholders from its clientele with effect from January 2008, the Gems and Jewellery Export Promotion Council (GJEPC) has expressed concern for the overall impact of this move on the Indian diamond industry. Apart from the eight sightholders from India, there has also been pruning of three Indian-owned firms based in Antwerp.

Addressing the media, Sanjay Kothari, chairman, GJEPC, said, “As per last year’s figures, a total of 34 Indian companies were appointed as sightholders for DTC. According to their recent announcement, 8 out of the 34 have been removed. The new list has, in all, eliminated 25 established sightholders, which means that 75 firms will now receive regular supplies of rough diamonds for a three-year period, down from the current 94.”

According to Kothari, while DTC has ascribed the move to a global shortage of rough diamonds, it has clouded its own reasoning by adding six new clients and drastically increasing the allocations of rough diamonds to several existing firms. He said, “While a shortage of rough diamonds worldwide is indeed a reality, the GJEPC estimates that the shortfall will be no more than 10 per cent of current global demand.”

In Kothari’s opinion, “This move by DTC is going to create consolidation of the business in the hands of a select few, and small and medium enterprises dependent for rough diamond supplies on intra-trade dealings with sightholders will discontinue. This will add up to the unemployment woes that are already a matter of concern to the industry, and it will affect the manufacturers as well. Further, this move will cause discomfort even among existing sightholders, while the ones who have been removed will have to bear major investment losses. Mega expansion and investments were undertaken by companies toward integrating manufacturing facilities, and now they would be denied of assured rough supply, which will greatly affect their set-up.”

Although there is no official announcement so far, the eight companies that have been excluded are – D Navinchandra and Co., Classic Diamonds, Bhansali and Co., Living Stone, S Vinod Kumar and Co., Suresh Brothers, Ramkrishna Exports, and B Vijaykumar and Co.

– Zainab Morbiwala, Mumbai Bureau

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