Financial Daily from THE HINDU group of publications
Tuesday, Apr 13, 2004
Industry & Economy
Gems & Jewellery
Our Special Correspondent
THE Indian diamond-studded jewellery industry, which has already carved out a glowing presence in the global market, is now acquiring a new dimension: diamond certification.
Increasing consumer awareness regarding the quality of diamond products and the trend of the industry to provide more value for money to consumers in a competitive regime have fuelled the growth of this barely five-year-old phenomenon of diamond certification in India. And indication of the growing trend can be had from the figures compiled by the Gem and Jewellery Export Promotion Council (GJEPC).
The International Gemmological Laboratories (IGL), which set up the first diamond certification lab in the country in 1998, certified 500 stones that year, but now it does the same number in a month. The International Gemmological Institute (IGI), which set up shop in Mumbai a year later, has a daily business of 700-1,000 stones.
"Definitely, there is more to come in this regard in the coming years given the mammoth size of the Indian jewellery industry," says a market analyst.
Another factor that has added momentum to the trend towards certification is growing exports, especially in the product range of `certifiable sizes.'
As India strengthened its moorings in the global market, the industry found that it could no longer afford to ignore the requirements of overseas buyers, who earlier had to often go through a winding process of purchasing stones in India and taking them back for certification.
Points out a market analyst: "Imagine, the largest diamond manufacturing and exporting country did not have even a single certification lab of its own. But today, with the labs here, the cost of certification has come down significantly, apart from resulting in saving time."
According to an official of GJEPC, currently stones from India are being certified to 20 points and upwards, while the domestic market is concerned only about certification of 24 carats. This trend clearly mirrors the maturing of the Indian jewellery market, with the foray made by De Beers resulting in the rise of brands and branded jewellery. In fact, the number of persons trained by GII during its three decades of existence is estimated to be about 5,000, which clearly reflects the increasing demand for such courses.
It was actually IGC that started the trend for diamond certification in India, when it set up the first lab in India in 1998. "Back then all the diamond certification market needed was identification and someone to follow it up. In 1988, we certified 500 stones. Today, we are doing 500 in a month," says an official of IGL, which has now changed its identity to EGL (European Gemmological Laboratory).
While GII started diamond certification in India in 2000, IGI's Mumbai laboratory, set up in 1999, was the fourth one of the reputed institution worldwide, the other three being in Antwerp, New York and Bangkok. "We had started with three gemmologists, but today we have 85 trained professionals. In fact, in October last year, our turnover was equal to our entire annual turnover three years ago. We are now in process of setting up a station with a complete team of gemmologists at the SEEPZ Special Economic Zone," according to an official of IGI.
Rapaport, which came into India a little over 19 months ago, represents the renowned Gemmological Institute of America it sends the stones to its labs in California and New York. "Initially clients were hesitant because of the time taken, which was about three weeks, but in recent months there has been good response," says an official of the institute.
However, the gemmological laboratories do have some concerns. One is ironically an upshot of technological advances this relates to the threat posed by synthetic stones and artificial treatment of diamonds.
"Here an important requirement is research and development. The existing laboratories also have to upgrade themselves in technological terms," says a trader. The other concerns relate to certification of jewellery (or mounted stones) and absence of outside supervision over the laboratories.
Notwithstanding these concerns, industry analysts are bullish about the growth of the certification market, with some predicting that the growth of this market in India will outdistance other overseas market.
"Five years down the line, the majority of stones in retail stores will all be certified. We should focus on setting up new certifications laboratories, as the existing ones may not be sufficient to brook the growth in demand for certification," an analyst said.
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