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Diamond merchants eye China

Sunanda Sanganeria

Following in the footsteps of their global counterparts, diamond merchants from Gujarat have started eyeing China as a potential jewellery-making market.

Lured by the superior jewellery designing skills of the Chinese, about a dozen diamond merchants, controlling 70 per cent of India's biggest export industry worth $7.7 billion, have set up workshops in China.

R Surani of the Surat-based J B Diamonds told Business Standard, "The Chinese designer jewellery pieces, set in platinum and white gold, have a far greater appeal in the West than the heavy jewellery designed in India."

J B Diamonds, one of India's top 10 diamond and jewellery exporters, runs a factory at Run Yu in China's Guangdong province, employing over 600 workers.

"The factory is three years old and contributes about 61 per cent of our global finished jewellery sales," he said. In fact, sales from the Chinese factory were already higher than those from its older Bangkok facility, which, too, makes jewellery under the label Jacob's.

Surani said all jewellery pieces made in the Chinese factory were sold in exclusive outlets in the US, Europe and Japan.

Currently, most Indian diamond merchants do not export finished jewellery; they rather stress on polished loose diamonds. India exports 9 out of every 10 diamonds, but has off late started entering the branded jewellery market.

P Nanavati, president of the Surat Diamonds Association said, "There are other Surat-based merchants who are venturing into high-value finished jewellery trade."

About 10-15 merchants have set up factories abroad, mainly in China, which is considered to be cost-competitive.

China had low manpower costs, better design skills and operational ease, Rajiv Tiberwal, another exporter from Surat, said.

"Some Surat diamond makers have close links with Hong Kong, so when they enter the jewellery manufacturing business, they prefer to stay close to the sellers for processing the latest jewellery and logistical support," he added.

Surani said the manpower costs in China were comparable with the domestic market. Local diamond cutters earn Rs 3,000-5,000 per month.

"If India wants to expand to an annual revenue of about $10 billion in the next three years, it will have to focus on branded jewellery exports," Nanavati said.

India's finished jewellery exports stood at $1.22 billion last year, while exports of cut and polished diamonds stood at $6.19 billion.

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