China Poised to Dethrone India as Diamond Export Hub .

India’s unquestionable position in the global market as a diamond exporting hub is now under threat from China, multiple speakers predicted at an international diamond conference in Mumbai that began Tuesday.

“China has almost caught up with India in its historic tussle between the two mighty growing economies. The Chinese have announced their arrival on the gems and jewellery sector by ruthlessly going about conquering huge African mines,” said Chaim Even-Zohar, chairman of the Tel Aviv-based Tacy Diamond Consultants, a diamond industry consulting service.

“In 2008, China imported $26 million carats and exported $23 million carats. It was also noticed that diamonds have come to India via China, which is startling. China is making heavy inroads into Africa, buying huge mines around the country. All of this should be a wake-up call for Indian manufacturers,” he added.

Gareth Penny, former chief executive of the De Beers Group – the world’s leading diamond company – and keynote speaker at the conference, took a similar stand. According to him, while the market share of India and China in the global market stood at 7 per cent and 6 per cent, respectively, in 2009, it was estimated to stand at 10 per cent and 11 per cent, respectively, by 2016.

Moreover, Penny said, the low manufacturing cost was attracting multinationals to open production centres and offices in China.

The popularity of Chinese goods has also started threatening the Indian market and manufacturers are finding it hard to compete against the rising swell of Chinese-made jewels, which are available at a lower price tag, Penny said at the third edition of the International Mines to Market Diamond Conference 2010, hosted by the Gem and Jewellery Export Promotion Council of India (GJEPC).

According to Tacy’s Even-Zohar, the global recession has severely hit the highly sensitive diamond market. Currently, diamonds prices have stabilised 15-20 per cent lower than the 2007 prices. “This is due to the ripple effect felt and overstocking that was indulged in by manufacturers,” he added.

Pranay Narvekar, strategy consultant at Rosy Blue (India), the Indian arm of the Antwerp-based exporter of polished diamonds, said huge demand was seen in the second quarter of 2010, but one needs “to understand if it is sustainable or a one-time blip.”

“The retail demand in 2010 will be flat, but polished and rough diamond demand is expected to rise 21 per cent and 72 per cent year on year,” Narvekar said.

Source : tehelka.com