India looks north to expand jewelry business
Doug Ashbury
Northern News Services
Yellowknife (Nov 13/00) - Representatives of the world's largest diamond-cutting and polishing country are eyeing the NWT's rough diamonds.
Kaushik Mehta is the leader of a 13-member delegation from India who visited the NWT last week during a trade mission. The delegation was drawn from India's Gem and Jewellery Export Promotion Council which has 7,000 members.
Mehta says if India is going to continue expanding its $12-billion gem and jewelry export business, it needs a new rough diamond supply.
About $9.8 billion of that $12-billion industry is in cut and polished diamonds. India's biggest buyer is the United States.
"India is a leader in cutting and polishing. But the rough (diamonds) go through Belgium. Eighty per cent by quantity and 60 per cent by value (of the world's rough diamonds) go to India. We want to see the rough go directly to India," Mehta said.
And when it comes to turning that product around and selling internationally, Indian companies have 2,000 offices abroad.
Indian diamond businesses would like to remove the middleman from the diamond equation and have BHP set up a sales office in India.
An office in India would have been difficult to establish in the past. After colonialism, India closed its borders to outside businesses and intervention. But that has changed and India is more liberal.
If BHP were to set up an office, it would be able to feel the pulse of the Indian market, Mehta said.
Future is in Canada
About one million people work in India's diamond and diamond-related businesses but the country has no diamond mines. About 100 people work in the NWT's cutting and polishing industry.
"We are also looking for cutting and polishing opportunities," Mehta said.
There were several diamond firms represented during last week's trade mission, and Mehta said any one of these, or a hundred back in India, is capable of setting up a cutting and polishing joint-venture with a Northern partner in the NWT.
A joint venture with BHP is unlikely because the company has capped the amount of rough diamonds that it will make available to Northern manufacturers. But Diavik and De Beers' Snap Lake are possible opportunities, Mehta said. Last week's visit could, a few years down the road, lead to an aboriginal-Indian joint-venture.
Hemal Chokshi with D.Navinchandra and Co. Ltd. in India, believes in the "mine to market" approach. That means buying rough diamonds directly from the mine, cutting and polishing, and manufacturing diamond-gold jewelry and selling it to the consumer.
"This is the best way to add value to the diamonds. We are looking for more supply. Our company is young and we have to grow," he said. Last year, the company bought $100 million in rough diamonds. It gets 25 per cent of its rough diamonds from Australia's Argyle Mine.
Chokshi said Canada is the future when it comes to diamonds and will emerge as a top producer and play a major role in the global diamond market.
