A diamond delegation from India reports that the diamond manufacturing center of Bombay does not feel threatened by developments in Bangkok. In fact, Indian manufacturers are looking forward to more opportunities for trading here.

            Although Thailand is making rapid gains in its newly-developed diamond manufacturing industry, it will never pose a challenge to the established manufacturing center of India, according to members of India’s Gem & Jewelry Export Promotion Council.

            The council is an agency of the Indian government, which all exporters are required to join. It has more than 4,000 members, 90 percent of which are in the diamond trade.

            Prabodh Mehta, a manufacturer and exporter of diamonds, led a recent diamond delegation of the council, which visited Hong Kong, Korea, Singapore and Thailand. Other delegation members included Gautam Mehta, Vasant Mehta and Nihal Dhadda.

            “We are the world’s biggest diamond manufacturing center, as far as carat weight is concerned, and we don’t see any threat from the Thai industry,” Prabodh Mehta said.

            The world market consumed 15 million carats of diamonds last year and India produced 10.7 million of them, according to the council’s figures. “Four out of five diamonds that are set into jewelry are manufactured in India.” Pointed out Gautam Mehta. “Most people don’t realize this.”

            The delegation studied the market needs of the four countries it visited. Hong Kong currently consumes 14 percent of India’s production, while Thailand accounts for a mere 3.7 percent. But this trend is likely to change, the delegation members said.

            “Those figures might just reverse themselves very soon, commented Vasant Mehta. “I think this year, Thai consumption will rise to more than six percent. As a trading and distribution center, Hong Kong is more capable and advanced, but Thailand has the potential to overtake it.”

            While Thailand has a long way to go toward developing as a diamond manufacturing center, its potential as a world trading center looks much more promising, Vasnat Mehta said. “We see Thailand as a big jewelry manufacturing and trading center. People from all over the world want to come here and buy jewelry, because the quality is quite high.”

            The Indian diamond industry welcomes this trend, he added. “If Bangkok develops into a world trading center for jewelry and loose stones, then we will have fewer buyers coming to Bombay. But that would not be a threat to our industry. It would just be a transfer of selling points, a diversion of Indian diamonds to Thailand.”

            Currently, about 100 Indian diamond manufacturers operate trading offices in Thailand. That number now saturates the market here for Indian diamonds, although if Thailand develops into a world trading center, more Indian traders will come, Vasant Mehta said.

            India is likely to maintain its manufacturing edge over Thailand, especially for smaller stones, the delegates stressed. “It’s not as economical to manufacture smaller stones here because the labor costs are higher than in India,” Vasant Mehta said. “It makes more sense to invest in jewelry manufacturing in Thailand instead of diamonds, because there’s a higher mark-up in jewelry.”

            In recent years, India has made increasing strides in manufacturing larger stones, due to improved technology, according to the delegates. “About 20 percent of our production now consists of 10 points and up,” Prabodh Mehta said. “We are also producing more fancy shapes. We’ve improved our quality and they are now accepted in the international market, so we’re producing higher quantities.”

            The delegation visited several jewelry manufacturing companies during its visit here, to assess the market and promote Indian diamonds. “We want to create an awareness of the range of diamonds available from India, since this is a big diamond consuming country,” Vasant Mehta said.

            The US remains India’s largest market, consuming 32.9 percent of the diamonds it produces. The recession could actually work in favor of the Indian industry in the long run, since it specializes in smaller stones.

            “I think as the recession eases up, the first thing buyers will want is lower-end jewelry,” Vasant Mehta said. “India will then have an advantage over those countries producing larger diamonds.” He predicts US consumers will return to jewelry shops in large numbers by this fall.

            International press reports exaggerated the impact of the Gulf Crisis on the Indian diamond industry, the council delegates said. They said they know of no large factories which were forced to close by the economic slow-down, although some cottage industries were affected.

            “We read reports that 150,000 cutters were laid off, which is an exorbitant figure,” Vasant Mehta said. “Actually, maybe 10 percent of the 400,000 total cutters stopped working temporarily, but they weren’t laid off. Diamond cutters in India keep alternating between cutting and farming, depending on which is more profitable. Last year, we had a good rainy season and an economic slow-down, so they switched over to farming.”

            The recession caused only a slight drop in production, he said. “Anyhow, the recession’s coming to an end and we see a very good year ahead,” Vasant Mehta concluded.

            The council delegation also downplayed the current political turmoil in India as only a “temporary” problem for the diamond trade and other industries.