INDIA

It S 6 b O n a - f l d e b o o m t i m e for Indian jeweiry and gem manufacturers, in the

past year alone, net exports of diamonds, gold jewelry, and gemstones were $15.7 billion, a 32 percent
increase over the previous year's export figures. The Indian government, meanwhile, continually raises the
bar on export targets for the sector—and the industry doesn't disappoint. In fact, this year's original goal
had already been surpassed by the end of last year.
Approximately 40 percent of India's jewelry and gemstone output is destined for America. This hefty
growth in Indian imports is good news for American wholesalers and retailers who are looking to offer their
customers a quality product at a highly attractive price.

Cover and inside model photography courtesy of The Gem S Jewellery Export Promotion Counclt.

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 Beyond just an increase in exports, this growth is a strong
indication that India plans to transform itself from simply a diamond
processing center to a trading center for the entire jewelry industry.
Several diamond industry leaders decided a dozen years ago to
expand into finished goods, and in the intervening years they were
joined by more and more colleagues. Many now say that India is
becoming accepted as a one-stop destination for a variety of
jewelry industry needs, including such Indian-developed technology
as a new casting process by Livingstones and patented new
diamond cuts by Lakhi Group (Pristine Hearts) and Livingstones
(Extra Fire). When discussing the status of the industry, the
executives say they expect that global retail giants like Wal-Mart
and JC Penny to source their jewelry directly from India soon. They
point out that India's main jewelry trade fair, the India International
Jewelery Show (IIJS), has matured into a major international trade
event with an expected turnout of 30,000 qualified buyers this year.
But perhaps the best supporting evidence that the world is
looking to India for something more than just polished diamonds can
be found in the fact that its greatest export growth occurred in the
finished jewelry goods sector which grew more than 42 percent to
a total of $3.8 billion. That's still less than five percent of the
world's total, but for an industry that came from nowhere a decade
ago, such growth is a sign of a healthy business.
"The industry is doing excellently," enthuses Bakul Mehta, chairman
of the Gems 8. Jewellery Export Promotion Council (GJEPC). the
organization that guides and monitors the industry. His assessment is
shared by many of the companies who are leaders in diamond exports,
jewelry exports, or both. "The Indian jewelry industry is growing by
leaps and bounds," said a spokesman from Goldstar Jewellery, adding
that it "is today one of the most emerging industries in the world."
Goldiam International. Ltd.
Industry leaders point to several 't,\ Suashish Jewels
developments as likely reasons for this \
growth. One was the change in attitude of "•
buyers around the globe. "Ten or fifteen ,_,—<^
years ago, people would buy gold as much for
an investment as for pleasure. Now they buy
diamond jewelry," observed Ghanshyam
Dholakia of the Hari Krishna Group. "The
mentality has changed, particularly in India.
There is a confidence that prices will
continue to go up." he said. Sanjay
Kakadia, of Chirag Designs, says that
efforts by DeBeers to promote diamond
sales could be a factor, too. "Significant
domestic and export opportunities for • .^
Indian industry could also arise because of a
major promotional program lauched by DTC . . .
to boost the marketing of their products in India and abroad," he
explained, pointing out that the goal was to create "incremental
demand" for diamonds and jewelry. He also pointed out that a trend
in the U.S. market toward smaller stones tends to favor Indian
exports.
Another reason cited by many executives was an expansion into
new markets or a heating up of markets like the United States and,
in particular, the Middle East. Amar Mehta. chief executive at
Livingstones noted that the market in the Middle East is growing
"at a phenomenal rate" and that better quality diamonds "are so
much in demand there." Rashesh Shah, managing director at
B. Vijaykumar, India's largest exporter of diamonds, concurred,
saying that many companies "are now turning to newer markets like
European countries. Middle East countries which have always had a
*.v
Lakhi Group
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fascination with Indian jewelry,
and to South Asian markets
where Indian jewelry is better
Goldstar Jewellery priced than those from other
Limited
countries." Vijay Shah, a partner
in J. B. & Brothers, with a strong
presence in the United States.
echoed that statement, explaining that his company was "trying to
develop the Asian market."
While exports account for the bulk of the incomes of these
companies - many were set up for the sole purpose of exporting
jewelry and, in some cases, specifically to the United States - some
also cater to the domestic market where demand for both diamonds
and diamond jewelry has risen.
"We are also focusing on the retail Indian domestic market and
have built branded jewelry and watches for the local market," reports
Rashesh Shah of B. Vijaykumar. Watches in particular, he said, both
studded with diamonds and plain, "have the latest trendy designs for
all age groups." One diamond jewelry manufacturer and exporter,
Kirtiials, a group company of Dimexion Diamonds Ltd.. has recently
opened three more retail outlets, prompting a visit from Varda Shine,
sales director of the Diamond Trading Company. But it was in the
export category where the biggest increase was registered.
Even China was cited as a place where Indian exports were either
growing or would be growing soon. But more than a huge potential
market, the subject of China was more often discussed as a
possible diamond and jewelry manufacturing competitor, given its
cheap labor supply. Interestingly, the views were widely divergent.
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Shine, Sales Director for the Diamond Trading
Company, visits the Kirtilals retaii outlet in Coimbatore.
India. Like many big diamond jewelry manufacturers.
Kirtilals, a group company of Dimexion Diamonds Lid.,
sells its products both domestically in India in branded
stores and exports them to customers around the world.
Ms. Shine is fourth from the left.
"Certainly China will be a competitor." commented Satish Joshi of
Ratilal Becharial & Sons, a DTC sightholder and part of the Jasani
Group, whose jewelry manufacturing division sells its products
under the 'Jasani - Elegant Collection" brand. "It's part of life."
Ghanshyam Dholakia of the Hari Krishna Group, said, "China will be
competition at some time. The same technology is available all over
the world."
Others did not agree. "China may be looking like a problem for
India." according to Samir Kakadia of Patdiam Jewellery, "but it is not
and it can never be compared to India." The reasons given for this
point of view revolved around durability and quality of manufactured
goods in general, in which the Chinese industry was seen as lacking.
Perhaps the most common point of view on this subject was best
expressed by Bakul Mehta of the GJEPC who said that he felt that
China was not a threat "in the short run." He, too. cited quality as the
reason, pointing out that "it took us 40 years to get to this point." He
also added a conciliary note: "I think there is room for everyone."
This is not to say every company in India Is operating at the
highest levels in design, execution or on-time delivery-few make
this kind of claim. "In general, the top 20 factories are doing well,"
offers Rashesh Bhansaii, managing director of Goldiam, a diamond
and jewelry company with $55 million in sales last year. "The top 20
have everything in place - marketing, sates force, and they
understand the U. S. market. Everyone else is coming up to
standard. They're not there yet." It's difficult to judge the accuracy
of this observation, but American buyers need not be concerned
since most Indian companies with offices in the United States,
including all of the ones featured in this special section of JCK.
deliver the highest-quality merchandise.
INDIA
Marketing, sales force and an understanding of the American installing fume-free refining machines. And many companies boast
market are only three of the factors that are cited for India's rise in of their certification by DTC, lADC and/or Rio Tinto, which require
jewelry sales. Others cited different priorities. "Product healthy working conditions as part of their certification. It is clear
development is key," says Satish Joshi of Ratilal Becharlal, pointing that the most successful truly believe that their success is due in
out the extensive use of CAD/CAM stations, the latest software large part to the efforts of their workers, and keeping them well is
and staff training throughout the industry, "India's competitive important. This is an attitude that is prevalent in all of the most
advantage will center on its skilled labor combined with a ready successful companies.
adoption of leading edge technology and an increasing degree of
Ultimately, though, the kind of success that the industry in general
vertical integration." says Sanjay Kakadia of Chirag Designs, And
is having comes from knowing your market, making what it wants and
nearly everyone cited India's practically unbeatable combination of
finding some way to deliver the product at a competitive price
skilled labor and its position as a supplier of diamonds as central
regardless of the competition. "We have always had growth each
reasons why it can continue to post remarkable gains in exports, and
year," says Satish Joshi of Ratilal Becharlal. "And we expect to
not be overly concerned with any perceived threat from China's
continue this by doing our jobs better," he continued. Hari Krishna's
labor force. Lastly, every single company contacted for this article
Dholakia puts it in a simpler form: "We try to better ourselves each
mentioned customer satisfaction as a top priority.
year. We try, try, try, then we have success."
In a trend that seems to have picked up momentum in recent
years, the executives also referred to the activities that their
companies undertake to benefit the society they live in, both within NET EXPORTS OF GEMS & JEWELRY
the workplace and outside it. While this Is nothing new for many of U.S. DOLLARS
the diamond houses that have been in business for a century or Exports 2005 2004 Percent
Increase
more, awareness of it has only emerged in recent years. "We believe
that a company cannot survive isolated from society, because a Diamonds 11,181 billion 8,627 billion 29,60%
company is an integral part of society." explains Sanjay Kakadia of Gold Jewelry 3,813 billion 2,680 billion 42.23%
Chirag. A Shree Ramkrishna Export spokesman agreed, noting that
Colored Stones 192 milllton 178 million 8,10%
for workers to be happy, "their society has to be healthy." As a result
Other 133 million 104 million 27,18%
of this corporate philosophy, both
these companies, like every one Exports of Rough
356 million 535 million - 33,45%
Diamonds
surveyed for this report, donate
heavily to support numerous Total Exports 15.677 billion 12.127 billion 29.27%
educational and medical Source (jeins & Jewellery Export Promotion Council
2004 figures are for April 2003 (o March 2004.
endeavors like schools and 2005 figures are for April 2004 to March 2005,
hospitals. Several companies like
K. P, Sanghvi and Shree Ramkrishna
Exports have established charitable
Shree Ramkrishna Export
trusts which they generously support
and which provide a wide range of
services to the community. These can be anything from dam building MoM Diamonds USA Inc.
in rural areas to AIDS awareness clinics in cities to recovery efforts
from natural disasters. Tsunami relief was one cause that received a
lot of attention from these organizations.

Being socially responsible, as it is often called, is especially

relevant to the industry's own workers. The GJEPC. as part of its
mandate to improve the industry, emphasizes the importance of
providing a clean, comfortable environment for those who make the
jewelry as well and those who manage the workers. Gold Star, for
example follows the principle of "charity begins at home" by
implementing a number of programs for staffers and their families
like free medical health camps and yoga classes as well as

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