Main manufacturing state of Gujurat set to see industry hit $32bn.
The Indian diamond manufacturing industry, mainly based in the country’s western state of Gujurat, is due to grow by 100 percent in the next two years, offering further evidence that the country is one of the next big players in worldwide jewellery markets.
The cut and polished diamond (CPD) industry in Gujurat currently manufactures 95 per cent of the diamonds exported by the Indian gems and jewellery industry. An increase in demand for diamonds within the country and also from China, the US and UAE, means India is seeing a boost in value of the polished gemstones, as rough prices continue to rise.
The last fiscal year has seen the diamond industry in Gujurat register a 60 percent increase in its processing of polished diamonds, with an industry worth $26bn compared to 2009-10’s $16bn.
Now predictions have been made that within the next two years the Indian diamond cutting industry will see a further 200 percent growth, bringing total processing to around $32bn for the 2011-12 fiscal year – double the 2009-10 value.
Industry experts believe the valuation of the rough and polished diamonds is a major factor behind increase in the export coupled with the increasing demand from the key consuming markets in the world. As the trend is likely to continue for the coming months, the diamond manufacturing sector is likely to witness 25 percent growth in the current year.
Chandrakant Sanghavi, regional director of Gems and Jewellery Export Promotion Council (GJEPC) said: "There is a phenomenal growth in the state’s diamond sector after the global recession in 2008. The manufacturing capacity has gone up significantly in the last one and a half year."
Sanghavi noted that rough diamonds have increased in price by almost 30 percent since January this year, with polished diamond prices increasing by 15 percent. Prices are due a rise in the coming months, despite mining of rough diamonds being described as "stagnant."
As a result of rough and polished prices going up, the lapidiary workers are also seeing an increase in their wages, with a near 20 percent increase in pay packets. Wages are set to imporive a further 10-15 percent. Dinesh Navadia, president of Surat Diamond Association (SDA) said: "The diamond workers are paid on piece meal basis. Thus, more work means more money for the workers. Most of the diamond manufacturers have started offering incentive schemes to their workers and this time around the Diwali bonus is likely to increase."