The Gem and Jewellery Export Promotion Council’s request that manufacturers stop importing rough for a month is strong medicine, considering rough imports into India average about $600 million of month. But I don’t think anyone is objecting in this shaky market. I just spoke to Vasant Mehta, chairman of the Gem and Jewellery Export Promotion Council, who gave me more details …
How do you plan to enforce this?
Well it’s voluntary. This is not a ban. It’s an official request from the trade body to stop imports. I think people will respect the request of the Council. There may be stray imports here and there but we are not worried about it.
How have the producers reacted?
I haven’t heard anything negative. Like us, the producers are watching the situation. We had a lot of sightholders at our meeting and nobody spoke against it. There is certainly plenty of rough on the market right now. I think De Beers will understand that the sightholders are members of the Council and want to support us.
There is a recession all over the world, and in a recession the first thing affected is the luxury segment. If one side of the pipeline is basically blocked, it makes sense that you shouldn’t keep putting goods into it. Right now there is heavy indebtedness and this will reduce a lot of the pressure on the industry’s financial institutions.
How long will this go for?
For now, it’s four weeks. We are going to review the situation in the last week of December, and we will ask the manufacturers if they want an extension.
There are rumors that other centers may take similar measures.
It was discussed at the Antwerp conference, but we don’t know if they will. We consider ourselves the leader of the diamond industry — certainly in terms of volume – so we are just going to do what we need to to get our trade back to health.
There are press reports that as many as a million workers may be laid off from the manufacturing sector.
There are no official figures, but we believe that it will be about 25 to 35,000. However, when you consider our total workforce is 700,000, that only comes around to 3 to 4% of the overall number.
Also, keep in mind, during the Diwali holidays, many of the workers go back to their villages. So for some it is just an extension of the holidays. This happens in regular times also. Some factories open late, depending on their balance sheet.
UPDATE: Modern Jeweler has some interesting producer reaction here, with De Beers calling it “an unnecessarily blunt remedy.”