India Strengthens Position in Diamond Cutting

RAPAPORT... India increased its dominance in the cutting and polishingsector in 2017 due to relatively low costs that gave it a competitive advantageover China, according to Bain & Company. The Indian diamond-manufacturing industry grew 11% in 2017,outpacing the Chinese market, which increased 2%, Bain reported. That leftIndia with more than 90% of the market, versus China's low-single-digit-percentageshare, the consultancy firm said in its 2018 Global Diamond Report, which itpublished last week in partnership with the Antwerp World Diamond Centre(AWDC). India's manufacturing sector has benefited from cheaperlabor, improvements in workers' skills, advances in technology, and a favorableregulatory environment. Those factors also helped the country increase its productionof large stones, a more profitable segment, Bain explained. Relatively easy access to financing further contributed tothe 2017 rise, as credit enables cutters' to buy and process larger roughdiamonds. While banks tightened lending in 2018, the more transparent andfinancially healthier companies have managed to weather that challenge, itadded. Costs in China are also low by global standards, but arestill higher than in Indian hubs such as Surat, putting pressure on the abilityfor the country to grow its sector, Bain said. Polishing in other countries, such as the US, Belgium andIsrael, declined 6% due to high costs and an ageing workforce, the reportcontinued. Africa failed to gain significant market share due to low productivityand relatively high costs. Global revenues from cutting and polishing rose 2% in 2017,with manufacturers realizing profit margins of 1% to 3%, Bain said. Image: Rough diamond cutting and polishing. (De Beers)