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Home > Business > Business Headline > Report

China, a threat to Indian diamond industry

Summit Khanna in Surat | May 11, 2005 11:03 IST

India's position as the biggest diamond exporter seems shaky as China gears up for large-scale diamond manufacturing.

India's oriental neighbour is fast emerging as a major player in the field with several countries including Belgium, Israel and even India setting up cutting and polishing units in China.

Diamond exporters fear that China would dent the Indian diamond industry's prospects in the long term.

"India has been dominating the world's diamond cutting and polishing sector for several years. However, China is emerging as a major player in the sector and the Indian diamond industry is threatened," a leading diamond exporter of Surat told Business Standard, requesting anonymity.

"There are a number of diamond manufacturers from Belgium, Israel, and even India, who are setting up diamond cutting and polishing units in China," he informed.

Industry sources said cheap labour, technological expertise and advancement and quality labour are China's strong points. The Surat-based exporter said, "China has cheap labour like India and is thus cost-effective."

He also said that technology-wise, India was lagging behind China. "Technology is another area where the Indian industry faces a threat from China. Our diamond industry still uses semi-automatic machines. China, with its modern and automatic machines, is in a position to process the diamonds at competitive prices," he added.

"China's domestic demand for diamonds has increased with economic growth and higher incomes. If we talk about India, we still have to depend mainly on the exports to fuel the demand for diamonds," he further said.

According to Pravin Nanavati, another diamond manufacturer in Surat, the improvement in Chinese workmanship is another reason for concern.

"Though the Chinese artisans are not as good as their Indian counterparts as far as manufacturing of the bigger diamonds is concerned, they have developed mastery in processing the smaller diamonds. The Indian diamond industry may face rough weather if the Chinese workers become as good as Indians in cutting and polishing bigger diamonds," he said.

However, the China fear is still a speck in the horizon, it is time the Indian diamond industry wakes up the threat.

"There are around 25,000 to 30,000 people working in the diamond industry in China. This figure is more than 10 lakh in India. China processes an around 25 lakh carats each year, while India processes over 18 crore (Rs 180 million) carats of diamonds. China is way behind us at present, and it would be several years before it manages to catch up with India," Chandrakant Sanghavi, regional convenor, GJEPC, said.

"However, this does not mean that the Indian industry can relax. We need to bring in technological advances and improve our diamond cutting and polishing skills to stay ahead," Sanghavi added.

The Dragon enters

  • Sources said cheap labour, technological expertise and advancement and quality labour are China's strong points.
  • Also technology-wise, India was lagging much behind China.
  • Sources said improvement in the Chinese workmanship is another reason for concern

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