Can Mumbai replace Antwerp as the world's most sought after diamond destination?
If things go according to the plans of the Indian government, Mumbai may rob Belgium's Antwerp, currently the world's top diamond destination, of its prized position.
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, 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.
India is one of the largest importers of diamonds in the world as the country emerged as a major hub for processing of cut and polished diamonds.
India imported $1986.53 million worth of cut & polished diamonds during the financial year 2006-07. And the country processed about 58 per cent (worth $10.84 billion) of the world's polished diamonds (worth $18.72 billion) in 2006.
But India's exports are stunted by the dependence entirely on imports be it rough diamonds, gold or coloured gemstones.
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.
In the last few months, India has 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.