Following an earnest appeal made by leading players among diamond producers in the world, calling on Indian manufacturers to impose a moratorium of at least three months on the import of rough diamonds into the country to enable the country’s cutters and polishers to recover from the corona virus crisis. Five trade bodies representing India’s diamond industry have jointly issued a statement urging their members to voluntarily cease importation of rough diamonds for at least one month. The joint statement has been signed by the heads of Gem & Jewelry Export Promotion Council (GJEPC), Bharat Diamond Bourse, Mumbai Diamond Merchants’ Association, Surat Diamond Bourse and Surat Diamond Association. Copies of this appeal have also been forwarded to the Indian Government calling for urgent action in this regard.
According to the appeal made by the trade bodies in an open letter, the voluntary month-long ban will take effect from 15th May, 2020, and will help the industry survive the corona virus crisis and also send a clear message to lending banks, that it is not prepared to face further debt, while helping to clear the inventories of an estimated stock of US$ 7 billion worth of rough and polished diamonds held up in the World’s manufacturing capital, India, since the imposition of the lockdown on March 25th, 2020.
The Letter further states, “Import stoppage will help the industry face the challenge that has arisen out of turmoil in the global gems and jewelry market. The move will basically cause fewer roughs to enter the diamond pipeline and the manufacturing companies will thus face lesser strain and indirectly share in the financing burden and contribute to a faster restoration of normalcy in an otherwise healthy business.”
Full text of the joint appeal made by the five diamond industry trade bodies appears below:-
Sub: Appeal to voluntarily cease import of Rough Diamonds for one month from May 15, 2020
As you are aware, the Covid-19 pandemic situation is having an unprecedented impact on the global economy. Various countries across the world have declared lockdowns, and, by and large these countries have temporarily closed their economies. In order to fight this pandemic situation, India has initially declared a lockdown for 21 days, which has been extended for another 19 days. Various countries and different departments/ authorities of the Government of India have recognized and declared Covid-19 pandemic as a ‘Force Majeure’ event.
With these lockdowns, and various administrative actions including travel bans, etc. imports and exports of various products have been tremendously impacted. The Covid-19 pandemic is also having a huge impact on our industry, and, there has been a serious strain on the companies throughout the diamond value chain.
In the process of monitoring the situation & on responding to the plea from the members the GJEPC, we had several meetings of the top member exporters and local members of Committee of Administration of the GJEPC to discuss the current market scenario and possible steps that can be taken by the Members in consequence of the unprecedented issues arising from the Covid-19 pandemic, for strengthening the diamond industry.
Subsequently Vice Chairman and Convener (DPC) on behalf of GJEPC and BDB, SDB, SDA & MDMA have done consultation meetings with prominent members of trade in India and the world.
Based on the opinion received from such consultation and the decision taken after that in the Diamond Panel Committee of GJEPC and the four diamond associations, GJEPC has written a note to the Honourable Commerce Minister, Commerce Secretary, Economic Advisor and other Government officials and apprised them of the precarious state of the Indian gems and Jewellery industry currently due to this COVID 19 crisis which has called for urgent measures so that the industry may survive during this critical period.
In order to protect the interest of the industry at large during this current crisis, the need for urgent measures to be taken was discussed in the meeting and it was suggested that the individual members may consider the option of curtailing their import of rough Diamonds from 15th May2020 at least for the next 30 days.
It was assessed that such import stoppage will help the industry face the challenge that has arisen out of turmoil in the global gems and jewellery market.
On one hand this move will send a signal to the banking system that the diamond industry will not increase its indebtedness at the time when our downstream colleagues continue to meet consumer demand so that the bankers feel reassured & do not reduce the credit exposure to the industry.
On the other hand this move will basically cause fewer roughs to enter the diamond pipeline and the producer companies will thus face lesser strain and indirectly share in the financing burden and contribute to a faster restoration of normalcy in an otherwise healthy business.
Based on these inputs and consideration, the Chairman of the GJEPC, President of BDB, Chairman of SDB, President of SDA and President of MDMA urges its members as well as non-members to consider their commercial and contractual position individually, and, consider ceasing their imports of rough diamonds voluntarily for a month of 1 months from May 15,2020.
It may be noted that this is merely a suggestion by GJEPC and the four prominent diamond trade bodies of India to their members and non-members in the industry, issued in the overall interest of the industry and the related stakeholders. The members and non-members may take their respective decisions independently and voluntarily.
Also, it has been decided in the meeting to take review of the situation by all the trade bodies in the 2nd week of June to suggest further course of action in this regard.
In view of the above, all concerned are requested to consider this appeal in the larger interest of the industry and voluntarily cease to import the rough diamonds.