Mumbai to outshine Antwerp in diamond trade?

If things go according to the plans of the Indian government, Belgium's Antwerp, the diamond destination of the world, may be robbed of its priced position by Mumbai soon.

Now, around 70 per cent of all the diamonds in the world come from Antwerp. To change the situation, a Union finance ministry panel, headed by former revenue secretary M R Sivaraman, has chalked out plans to make Mumbai as the world's diamond hub.

The panel has also recommended a new fiscal regime for the gem and jewelry industry so that it rises up the global pecking order.

The diamond industry in India - concentrated mainly in Maharashtra and Gujarat - accounts for 80 per cent of the world's total exports of gems and jewelry. It employs around 10 lakh artisans and workers.

Recently, Minister of State for Commerce Jairam Ramesh said India's position in the industry had earned it the prestigious position of vice-chairman of the Kimberly process with the possibility of being chairman in 2008.

The Kimberly Process is a global initiative, which certifies rough diamonds. But India's exports are stunted by depending entirely on imports be it rough diamonds, gold or coloured gemstones. The country now imports close to US $8 billion of rough diamonds and nearly one million artisans are engaged in polishing them.

To find a way out, India is now lobbying for partnerships with African countries. For that, India is offering to build their local industry through technical assistance in exchange for permission to tap its immense reserves of rough diamonds. India will also provide technical assistance to African countries to ensure that they meet the Kimberly Process certification standards.

According to the minister, he held detailed discussions in this regard over the past three months with the ambassadors of a number of countries, including Russia, Canada, Australia, South Africa, Namibia, Lesotho, Botswana, Ghana, Angola, Azerbaijan, Armenia, Uzbekistan and Venezuela. And talks with Alrosa of Russia are in an advanced stage.

The Gems and Jewellery Export Promotion Council has also prepared a Vision-2015 roadmap for the industry.

Growing competition from China, rise of new materials like palladium and steel, development of synthetic diamonds and consolidation in the world diamond industry are the major threats for the Indian diamond industry now.