India I n d i a

A SUPPLEMENT

TO

India India SPECIALREPORT:

OBy Victoria Gomelsky

ON A BLISTERING Saturdayafternoon in July, workers were still outfitting the basement of Mumbai’slong-awaited Bharat Diamond Boursewith firefighting equipment. Stray dogsnapped in the shade of the bamboo scaf-folding, and scores of air-conditioningunits sat idle beneath blue tarps to guardagainst the monsoon rains.

But come Oct. 27, the eve of Diwali,the Hindu festival of lights, PrimeMinister Manmohan Singh is expectedto inaugurate the $250 millionexchange, ending more than a decade ofpolitical wrangling in which the bourse’sfate remained uncertain.

Located in the Bandra KurlaComplex, a fast-growing commercialdistrict adjacent to the internationalairport and Mumbai’s northern sub-urbs, the 200-acre property is themost visible sign of a new streamlined

focus for the Indian diamond trade.Beleaguered by a slowdown in the

U.S. high-volume retail sector, unfavor-able exchange rates between the weakdollar and strong rupee, and the ever-widening gap between rough andpolished prices, Indian diamantaireshave embraced a survival of the fittestmentality. By downsizing operations,diversifying their portfolios and hedgingtheir bets in India’s booming propertymarket, they hope to survive what’sbeing described as a “correction” in theUnited States and, subsequently, in theIndian jewelry business.

“Some people have downsized,not because of financial constraints,but because of strategy,” says PraveenShankar, managing director of

Revashankar Gems Ltd., one of thefirst Indian diamond companies todo business in the United States inthe early 1970s. “There’s weakdemand for near-gem goods. Youdon’t go on producing if there are no takers.”

As U.S. sales of commercially pricedjewelry stagnate, Indian companies are trimming pro-duction—in bothpolished diamondsand in jewelry—andthey’re looking tonew avenues of prof-itability, including thered-hot stock marketand local infrastruc-ture projects.

Let the trading beginCollectively, however, these com-

panies are focusing on India’s evolving role in the global diamondbusiness. Already the world’s diamond manufacturing leviathan,accounting for 85 percent of diamond production by volume andabout 60 percent by value, India has

Special Report: India

A downturn in U.S. jewelry sales promptsIndian diamantaires andjewelry manufacturers tocut back on production,focus on trading and lookEast to buyers who promisegreater profitability.

Survival of thesavviest

Mumbai’s Bharat Diamond Bourse (bottom left) will open this fall inside the Bandra Kurla Complex, the city’s fastest-growingcommercial district. Some 25,000 people, including sorters, polishers and executives, are expected to pass through the complexevery day. The move is the most visible sign of the Indian diamond trade’s collective drive to become more efficient.

I-2 I National Jeweler I September 2007 www.nationaljewelernetwork.com

Special Report: India set its sights on making Mumbai thehub of the diamond-trading universe,a position once owned by Antwerpand its sister centers, New York andRamat Gan, Israel (see related story onpage I-6, “The new diamond worldorder”). Bolstering Mumbai’s appealis the recent abolition of a 3 percentduty on the import of cut and pol-ished diamonds, which eliminatedany remaining barriers to free trade.

“Why would a diamond merchantset up an office, particularly inBelgium, when all the raw materialand manufacturing is here?” asksSanjay Kothari, chairman of the Gem& Jewellery Export PromotionCouncil (GJEPC), the quasi-govern-mental agency that is charged with promoting India’s gem and jewelrysector. “We’ve reached a saturationpoint in diamonds, so for growth andemployment, we need trading activity.”

The completion of the newbourse, 16 years after the propertywas purchased, is the clearest mani-festation of the Indian trade’s unifieddesire to make Mumbai a global dia-mond clearinghouse. Composed ofeight interconnected buildings con-taining 2,500 diamond offices ofvarying sizes, the 3-million-square-foot complex will boast state-of-the-art security, an ecologically conscioussewage treatment system, landscapedlawns seeded with plumeria andhibiscus plants and, perhaps mostwelcome, 64 elevators to shuttle

sorters, brokers, polishers and man-agement to and from the offices.

“We expect 25,000 people to go inand out every day,” says Anoop Mehta,bourse president and group managingdirector of Mohit Diamonds, aDiamond Trading Co. (DTC)sightholder based in south Mumbai’sOpera House district, along with therest of the Indian diamond trade.

Any jeweler who’s done business inIndia knows Opera House. Home to acollection of creaky, unsightly build-ings housing thousands of workers—most of whom commute from thenorthern suburbs for at least an hour toreach work—the neighborhood grewup in the mid-1970s, when traders andjewelry manufacturers began migratingfrom the nearby Zaveri Bazaar. It is theessence of a crowded Indian metropolis.Diamond runners carrying parcels ofstones taped to their bellies competewith taxis, cows, ox-drawn carts, streetvendors and hordes of pedestrians for afree bit of pavement.

Prasad Chambers and PanchratnaHouse, the district’s two biggest build-ings, are headquarters for some of theworld’s most powerful diamantaires.But their dilapidated appearances andaging, inefficient elevators hardly con-vey an inviting image. A combination oftoo many people using too few liftstranslates into long, sluggish queues onthe ground floor. Visitors with appoint-ments are routinely late.

Once the move to Bandra Kurla is

complete—a process that may take aslong as three years—observers expectsignificant time and cost savings.Transactions that now require multiplestops and countless wasted minutes navigating the chaos of Opera Housecould be done entirely within the secureconfines of the Bharat bourse complex,which will house banks, restaurants,customs offices, import-export agencies,appraisers and storage facilities.

“There is no need to waste time,”Kirtikumar M. Varia, chair of theBharat Diamond Bourse buildingcommittee, says. “Everything can befinished in five minutes. We will save alot of money.”

Back to marketing basicsEfficiency might well be the new

ethos guiding the trade. Even De Beers

echoed that theme with the announce-ment in mid-July that it is reorganizingits sales and marketing unit, the DTC,into two separate business units, eachwith its own management structure.

DTC Managing Director VardaShine will continue to oversee the dis-tribution of rough diamonds to DTCsightholders and producer partners.But marketing operations will nowbelong to De Beers GroupMarketing, headed by David Lamb,who will report to De BeersManaging Director Gareth Penny.

“De Beers and the DTC have beenactively looking at ways we can operatemore effectively and efficiently,” Shinesaid in a statement. “To improve ouroffer to clients and our producer part-ners, we need to focus on being theworld’s best rough-diamond distributor.”

FOR ALL ITS SIZE and global reach, the Indian diamond industry is remarkably intimate. So intimate, in fact, that most of its members can trace their rootsto Palanpur, a city in the state of Gujarat. In the earlyyears of the 20th century, a community of Jains, a smallbut influential minority religion in India, left Gujarat for Bombay, drawing upon their legacy as jewelers tothe ruling class to leap into the nascent business of diamond trading. It wasn’t long, however, before themerchants turned their attentions to diamond cutting.

“After India gained its independence from GreatBritain in 1947, the Jains hit upon an idea,” writes TomZoellner in The Heartless Stone: A Journey Throughthe World of Diamonds, Deceit and Desire. “Why nottake the cheapest rough for sale in Belgium—thetrash of the diamond world—and have it polishedback home instead of sending it to the craftsmen?”

The cottage industry the Jains created flourished inthe 1980s, when immense supplies of small, near-gem

rough from the Argyle mine in Australia gave theIndians a chance to prove themselves capable of trans-forming opaque shards of diamond dust into millionsof faceted specks. As the business grew, some venturedinto jewelry manufacturing. Throughout the decades,family members were recruited to help ensure theirrespective companies never lacked for manpower orthe ability to expand globally.

“J.B. & Brothers was founded in 1983 by Mr. Jitendra

Shah,” begins Mukesh Chaudhari, a marketing executivewith the fast-growing diamond manufacturer, before hedissects a complicated web of relationships typical ofvirtually every diamond house in Mumbai.

The trail begins with founder Jitendra, who residesin Belgium with his elder son, Miten, and his nephew,Nirav. Jitendra’s younger son, Premal, lives in Israel.Jitendra’s brother, Shailesh, lives in Surat with his son,Shaishav, while Jitendra’s two younger brothers, Vijayand Sanjay, live in Mumbai. The initials of the companyname stand for Jitendra and patriarch Babulal.

If there’s anything to be gleaned from the Shahs’diaspora, it is that family and business operate as one.

Even in instances where there are not enoughsiblings, cousins, grandsons or nephews to overseethe expansion, intermarriage supplies the rest.

“We have four brothers in this business, mytwo sons, my brother’s three sons and myother brother’s sons—and sons-in-law in HongKong, Antwerp, Los Angeles,” says Vasantlal R.Sanghavi, chairman of Sanghavi ExportsInternational. “They take care of everything,and not for commission.”

Sanghavi, like his peers in Opera House, lives insouth Mumbai’s exclusive Malabar Hill district, aleafy enclave overlooking the Arabian Sea. Even

away from the office, India’s diamond merchants, at oncecompetitors and comrades, unite.

—Victoria Gomelsky

Relative meritsThe close-knit Jains of Gujarat have prospered in the diamond trade by keeping it in the family.

From left: Amit Sanghavi, Vasantlal R. Sanghavi and Jay Sanghavi of SanghaviExports International, one of the Indian trade’s largest family businesses.

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Around the old Opera House buildings inMumbai, diamond runners carrying parcels ofstones compete for pavement space with taxis,pedestrians and ox-drawn carts.

Special Report: India In mid-July, the week before

applications for the 2008-2011 DTCcontracts were due, sightholders greetednews of the reorganization withapproval. But there was barely time tospeculate on what the changes mightmean for their businesses. Most wereworking late nights to complete theirapplications and prepare PDF files documenting, in painstaking detail,their marketing plans and financials.

Still, sightholders acknowledge theapplication process has improved.

The DTC has made it “easier and simpler,” says Ajesh Mehta, a partner

with sightholder D. Navinchandra &Co. “It’s about how your business iscoherent with the product they giveyou. It’s more efficient, more objec-tive and more focused.”

The subtext of his comment is thatlong gone are the days of Supplier ofChoice, version 1.0, the earliest incarna-tion of the DTC’s changing marketingvision, which insisted that sightholdersspend lavishly on (largely) ineffectiveprojects to bring their businesses furtherdownstream. Under Shine’s leadership,a more sober and realistic approach todiamond marketing prevails.

Even so, the tension in OperaHouse is palpable.

“There’s no time,” says Rajiv Shah,chief financial officer of ShreeRamkrishna Export, by way of explaining why an appointment withNATIONAL JEWELER has to be canceled.On his desk sits a letter from H. Goldie& Co., the London broker.

Weighing heavily on the Indiansightholder community, currently num-bering 37 companies, is the speculationthat up to a third of the DTC’s list of 93names may be cut when the results arereleased in November. The former cartelsimply has fewer diamonds to dole out.In southern Africa, beneficiation, theprocessing of rough stones into cut andpolished gems to bring producer nationsa bigger share of the downstream profit,has led to massive changes in the way DeBeers’ diamonds are distributed.

Larger, better-quality goods thatare well-shaped and easy to cut will,naturally, be directed to southernAfrica, where they can absorb thehigher cost of labor and make pro-cessing there a profitable venture.(Cutting costs in Africa rangebetween $70 to $100 per carat whilethose in India average about $8 to $10per carat.) Because Indian companiesbuilt their reputations on cuttingnear-gem smalls that no other centerwould, or could, cut, they are betterplaced to deal with the consequencesof beneficiation than their Belgian,Israeli and American counterparts.But over the years, some have gravi-tated to better qualities and largersizes, and it is these companies thatnow fear for their sights.

“Even the biggest sightholder is nottaking this lightly because he may losesome boxes,” says Nirav Bhansali, part-ner in Bhansali & Co., a sightholderspecializing in high-end bridal productfor upscale chain stores and independ-ent retailers. “The DTC isn’t interestedin your jewelry business; they care whatyou’re doing with the rough.”

Breaking the cycleAcross all diamond businesses, in

India and elsewhere, rough is the wildcard that keeps the trade guessing.Without a continuous source of sup-ply, the diamond factories risk losingworkers to competing industries suchas textiles. In Surat, the Indian citythat boasts the highest concentrationof diamond-cutting factories, reportssuggest an exodus has already begun.

Besides the DTC, India’s other significant supplier is Rio Tinto, whoseArgyle mine in Western Australia has

long been the Indians’ cash cow. Since1983, it has produced more than 650million carats of rough and generatedmore than $6 billion in revenue.Production, however, peaked in 1994, at42.8 million carats. In 2005, Rio Tintodecided to proceed with an undergroundmine, extending its life until 2018.

But the Argyle product—small,brown and of near-gem quality—is pre-cisely what the market is now rejecting.In the past, Indian diamond companiesstruggling to keep their factories in afinely tuned state of production wouldhave processed those diamonds anyway,stockpiling the inventory and accumu-lating debt. The market today reflects agreater degree of prudence.

“Today, the levels I see in invento-ries are comfortable,” says Shankar ofRevashankar Gems. “Some consoli-dation has happened. A small manu-facturer who owned, say, 25 wheels—it’s no longer worthwhile for him todo business. Either he’s aligned with abigger group or he’s moved out.”

The strength of the rupee againstthe dollar has severely impacted every-one’s profitability. While the exchangerate in 2006 averaged 45.67 rupees tothe dollar, it now hovers around 40.

“It hurts everybody in two ways,”Bhansali says. “One, my labor costhas gone up. We work on 4 percentmargins and those are completelyeroded now. And two, it’s a straightinventory loss in terms of currency.”

The Indian industry is no strangerto downturns. Those with a longer viewof the market say a shakeout occursabout once every 10 years, as it did inthe late 1970s, when the rupee gainedagainst the dollar for the first time inhistory; in the late 1980s, when ZaleCorp. filed for bankruptcy; and in themid-1990s, when Russian leakageschoked the market, ruining prices.

“The workforce in India has tradi-tionally been vulnerable to weakness atthe low end in the U.S.,” diamondindustry analyst Carl Pearson says.“The reality is that there are winnersand losers: Firms that have diversifiedmarkets, including selling to the localmarket and the rest of Asia, are doingwell, while those that are one-trickponies are suffering or being squeezed.”

The price of dutyThe same could be said of Indian

companies manufacturing jewelry forexport to the United States, whichdescribes the majority of factories in theSantacruz Electronics Export ProcessingZone (SEEPZ), a duty-free industrial parkin north Mumbai, not far from Bandra

IF LONDON WAS the capital of the diamondtrade in the 19th century, and Antwerp in the 20th,Mumbai is shaping up to be the capital in the 21st.

“The whole axis of the industry is movingeastward,” says Russell Shor, senior industry analyst at the Gemological Institute of America.“I don’t think any place will be a one-stop shop,but there’s a lot of room for India to be a center.”

Situated between the producer nations of Africaand Russia and the booming economies of the East,Mumbai—the trading center and the local bourse,which serves as its symbolic and logistical headquar-ters—has a geographical edge over traditional centers such as Antwerp, New York and Ramat Gan,Israel. But so do its up-and-coming rivals: Moscow;Shanghai, China; and Dubai, United Arab Emirates.

India, however, has a strategic advantage that trumps all of them: It has the raw goods(and duty-free imports to boot).

“Mumbai polishes the highest amount of caratage,so it’s quite natural that it becomes a polished andrough trading center,” says Anoop Mehta, president ofthe new Bharat Diamond Bourse, a 3-million-square-foot complex scheduled to open in north Mumbaithis fall. “It lacked the infrastructure, but now we’vegot the complex. It’s a natural evolution process.”

That process includes a changing politicallandscape that is reshaping how diamonds aredistributed globally. The Diamond Trading Co.(DTC), for example, is shifting greater control ofits rough distribution to its producer partners insouthern Africa, where calls for beneficiation—the processing of rough stones into cut and polished gems to bring producer nations a biggershare of the downstream profit—will allow localcutters to cherry-pick the finest and largestrough for their own factories. Analysts predictthe shift will have a drastic impact on how goodsfilter down to the secondary market.

“The conclusion seems inescapable that NewYork, Ramat Gan and Antwerp will be hit almostfatally in terms of having the DTC as a principalsupplier to their respective industries,” diamondanalyst Chaim Even-Zohar wrote in a June 2

editorial in Diamond Intelligence Briefs magazine.“Players in these markets must develop a supplyrelationship with Alrosa, BHP Billiton, Rio Tinto,or with new players such as Clifford Elphick’sGem Diamonds and other suppliers.”

Not everyone, however, thinks the old centers aredoomed, in part because a diamond exchange isoften the best or only way to reach the local market.

Bourses must be “regarded as networkingtools,” says Michael H. Vaughan, the secretarygeneral and new executive director of the WorldFederation of Diamond Bourses, a membershiporganization with 26 affiliated bourses. “In Indiaand China, many foreigners have a pied-à-terre atthe bourse because they manufacture there orhave found or created business opportunities inthe downstream market.”

Israeli manufacturers, in particular, are lookingto China, where the Israel Diamond Institute (IDI)recently launched a strategic campaign to positionthe country as a favored supplier.

“We want to enhance the presence of the Israelidiamond industry in this market, and we know thatin order to do so we must reach out to the Chinesepeople in their own language and on their own territory,” IDI Managing Director Eli Avidar says. “It is for that reason that we are launching the firstChinese-language portal Web site of any diamondcenter in the world, and opening an office in HongKong to serve the entire region.”

Five years from now, it’s not difficult to imaginethat diamonds mined in Africa, cut and polished by Israeli manufacturers—in Israel, Africa or elsewhere—and sold in China will represent a newparadigm for the diamond trade. In many ways, theglobal business already works that way.

“A look at import and export [figures] of the various markets shows there is a considerableamount of interdependent business activity,”Vaughan says. “So you could say that it is a kind ofecosystem that is constantly self-adjusting, affordingthe players those positions they function in best.”

—Victoria Gomelsky

The new diamond world orderAs the global trade spreads out and diversifies, traditional diamond centers have much to fear from the new-found influence of their rivals in the East.

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Special Report: India Kurla. Like their siblings and cousins inthe diamond industry, India’s export jewelers are suffering from poor currencyconversions and weak demand at the lowend. They’re also struggling with how todeal with the loss of GSP—GeneralizedSystem of Preferences—benefits.

On July 1, the U.S. governmentstopped recognizing Indian gold jewelryimports as a beneficiary of duty-freeentry, automatically levying a 6.25 percent duty that puts India on a levelplaying field with China, whose jewelrymanufacturers are not GSP-eligible.

It’s not clear who will absorb the increase—Indian manufacturers,American retailers or American consumers—or how the Chineseindustry, already lauded for the qual-ity of its finishing and competitivepricing, might benefit. What is clear,however, is that in order to survive,the Indians must operate even more efficiently.

“Let’s say someone orders 10,000pieces,” says Vishal Doshi, group executive president of Shrenuj & Co.,a DTC sightholder and jewelry manu-facturer publicly listed on the BombayStock Exchange. “We can take advan-tage of economies of scale just byordering more pieces. The duty can beshared and easily adjusted.”

Shrenuj is in an enviable position.In May, it purchased an 85 percentstake in Simon Golub & Sons, an 80-year-old American distributor, for$22.7 million. Rather than payingduties on finished pieces, it can usethe Seattle-based factory to set itscenter stones, thereby paying duty ona significantly lower value.

A shift in center-stone business topartner companies in the UnitedStates—or perhaps Mexico, whereNAFTA regulations provide duty-freeaccess to the U.S. market—is howmost Indian jewelers are expected tocircumvent the sticky politics behindthe duty. But they insist the Indianindustry will not escape unscathed.

“In jewelry, 300,000 to 400,000people could be affected,” theGJEPC’s Kothari says, adding thatthe GSP loss compounds an alreadytough marketplace. “Sales of jewelryare not encouraging in the last twoyears in comparison to other luxuryitems. Jewelry is not considered athing that needs to be bought.”

Kothari echoes others interviewedby NATIONAL JEWELER in singling outthe new Apple iPhone, which debutedin late June, as an example of a luxuryproduct that’s winning the battle forconsumers’ disposable income. Some

270,000 of the mobile phones wereactually sold by Apple’s third-quarterearnings call on July 25, though analystswere reporting inflated sales numbersafter they hit the market.

“I read that 700,000 of them weresold in one week,” Kothari says. “Whenwill there be a queue to buy jewelry?”

Forecasts for the coming holiday season reflect the Indians’ lackluster outlook. Besides the DTC’s solidly performing Journey campaign, “there’snothing substantial to hold the marketup,” says Somil Zaveri of C.J. Exporters,a diamond manufacturer with a relatedbusiness in SEEPZ, C.J. Jewelry.

“The industry as a whole is goingthrough a correction phase and we areall part of this gamut,” says Ashish Shah,managing director of Gold StarJewellery, one of SEEPZ’s largestexporters. “No one in this business shallremain unaffected, whether manufac-turers, wholesalers or retailers. And forthis reason, for sure I anticipate that thebusiness will be slow this time around.”

Winners and losersConventional wisdom dictates that

companies with too many tie-ups in theU.S. volume business are most vulnera-ble to the pressure of American-stylesupplier-retailer relationships (longcredit periods, late payments, poor cash flow). But not everyone in Indiasubscribes to the same philosophy.

“In every market there are peoplewho are shutting down and going out ofbusiness because of the liquidity prob-lems they are facing because they havetoo much exposure to any one customeror country,” says Mohit’s Anoop Mehta.“At the same time, you’ll find peoplewith good relationships in that countrywho are growing at 5 to 7 percent.”

Sanghavi Exports International, aDTC sightholder with both diamondand jewelry businesses closely linkedto the U.S. market, beats even thoseodds. Last year, sales of polishedgoods out of the firm’s New Yorkoffice totaled $70 million, ChairmanVasantlal R. Sanghavi says. This year,he expects that figure to increase by20 percent. The goals for his relatedjewelry business in SEEPZ, SanghaviJewels, are even steeper. Last year, thefactory did $47 million in exports tothe United States, Europe and Japan;this year, the target is $65 million.

“Orders are slower but I have my ownpeople—my family—and they don’t runafter commission, they look after thesecurity of the company first,” saysSanghavi, referring to the brood of chil-dren, nephews, sons-in-law and cousins

who manage the Sanghavigroup of companies (seerelated story on page I-4,“Relative merits”).

Indeed, Sanghavi’sson, Jay Sanghavi, directsthe SEEPZ operation, anewly renovated 70,000-square-foot building thatlooks more like a hip dot-com startup than atypical jewelry plant.With its lime green, periwinkle and dusty rosecolor scheme, garden-styleatrium and art-decorated interiors, the$12 million factory represents the bestthat SEEPZ has to offer.

Of course, not every company inSEEPZ has as firm a grip on the U.S.market. In fact, the appeal of doing business with America is steadily on thewane, says Liz Chatelain of Paso Robles,Calif.-based MVI Marketing, whoseIndo-Argyle Diamond Council hashelped connect Indian suppliers toAmerican retailers since 1994.

The increase in gold prices has virtually wiped out margins, which wereminiscule to begin with, and the pressureof meeting outlandish terms is simply toogreat to keep Indian companies investedin the game, Chatelain says. In other

words, short of their ability to order in volume, there’s little to recommendthe American majors. Instead, manyIndians are looking expectantly uponjewelers in their own backyard, whichthey service through operations located outside of SEEPZ.

“The growth rate [in India] is amaz-ing,” says Mehta of D. Navinchandra.The firm recently opened marketingoffices in Delhi and Calcutta. “We didn’tsee this market until about five years ago.”

To illustrate his company’s commit-ment to building the domestic business,Mehta screens an award-winning TVcommercial for D. Navinchandra’s newdiamond jewelry brand, Ira, named afterthe Hindi term for “mother earth.” The

clever spot, whose tagline is “One divinecreation for another,” depicts multitask-ing women as multiple-armed deities.

Outside of India, the company’snewest marketing office is in Dubai,United Arab Emirates, less than threehours away by plane and the gateway tobillions of dollars of untapped wealth.

“Historically, the Indian industryhas relied heavily on the U.S. as the end market for much of the outputfrom India’s vast cutting and polishingindustry,” says Nirupa Bhatt, marketingmanager of Rio Tinto Diamonds inMumbai. “Looking to the future andthe important role that the emergingmarkets of India, China and the MiddleEast have in driving global diamonddemand, it is becoming evident thatIndia’s manufacturing focus will notsolely be on fulfilling U.S. demand. Ibelieve the U.S. retail community needsto be aware of this situation and under-stand the implications it has for them.”

As if to prove this point, theGJEPC’s Kothari cites a recent report,“The Global Gems and JewelleryIndustry: Vision 2015: Transformingfor Growth,” commissioned by theGJEPC and researched by KPMG. Itpredicts the U.S. share of the world jewelry market will plummet from 50percent to 25 percent by 2015, whileIndia and China together will shift from20 percent to 40 percent.

Yet regardless of how quickly theeconomies of the East develop, theunavoidable truth is that theAmericans pioneered and perfectedthe volume business. They showedthe world that diamonds and gold arefashion accessories, not investmentitems. And the Indians, in their desireto grow, helped them do it.

“The U.S. is an organized market. Iget an order from a major for one ringand I have to make 10,000 of that ring.It makes my factory so efficient and sosmooth,” Mehta says. “That’s why wedepend on the U.S. and hope thatthings turn around.”

“Some people have down-sized, not because of finan-cial constraints but becauseof strategy. There’s weakdemand for near-gem goods.You don’t go on producing ifthere are no takers.”

—Praveen Shankar, managing director, Revashankar Gems

Panchratna House in south Mumbai’s Opera House district will phaseout as workers move to the new diamond bourse in Bandra Kurla.

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Special Report: India

I-10 I National Jeweler I September 2007 www.nationaljewelernetwork.com

The Pride of ındiaDESIGN GALLERY

“Nothing seems to have been forgotten, nothing overlooked,” MarkTwain once rhapsodized about India. He might as well have beentalking about the country’s export jewelers. In little more than a decade, they have turned the tastes of the American jewelryconsumer into their biggest area of expertise. Armed withCAD/CAM software and factories full of bright young things,Indian manufacturers are devoted to producing pieces that willsell in Los Angeles or Louisiana. From a six-row diamondbracelet in a fashionable mix of metals to a diamond medallionfeaturing delicate openwork, Indian-made jewelry, as you’llsee on these pages, is diamond-intense, detail-oriented andpriced right—proving Twain’s remark prescient, indeed.

Circle pendant necklace in 14-karat white gold

with 2 carats of diamondsby Dynamic Design Group;

suggested retail price is $1,999.

(800) 347-9999

Six-row bracelet inrose, white and yellowgold with 5.50 caratsof diamonds byDinurje; suggestedretail price is $4,999.www.dinurje.com

“Empress Collectionby Bijou” ring in 14-karat white goldwith 1.75 carats ofdiamonds by KiranJewels, shown fromtwo differentangles; suggestedretail price is $3,999.(212) 819-0215

Band in 14-karatwhite gold with0.35 carats of diamonds byDynamic DesignGroup; suggestedretail price is $699. (800) 347-9999

“Carousel” earrings inwhite gold with 1 carattotal weight diamondsby Gold Star Jewellery;suggested retail price is$999. (212) 391-2021 or www.goldstarjew-ellery.com

Special Report: India

I-12 I National Jeweler I September 2007 www.nationaljewelernetwork.com

Pendant necklace in 18-karat gold with 1.20 carats of round brilliant diamonds by Fine Jewellery; suggested retail price varies

according to diamond weight and quality, and is available upon request. (212) 265-3707

Butterfly earrings in goldwith 0.36 carats of dia-monds by Dinurje; suggestedretail price is $299. www.dinurje.com

Earrings in white gold with diamond micropavé by Sunjewels; suggestedretail price is available

upon request. www.sunjewels.com

Ring in 14-karat gold with rose-cut and rounddiamonds by FineJewellery; suggestedretail price varies according to diamondweight and quality, and is available upon request.(212) 265-3707

Heart pendant in 18-karat gold with diamond micropavéby Shrenuj; suggestedretail price is $599.www.shrenuj.com

Overlapping pendantwith 0.75 carats of white and champagnediamonds byInterJewels; suggestedretail price is $649.www.interjewel.com

Bridal ring with 1 carat total weightdiamonds and 0.50 carat center

stone by Gitanjali; suggested retailprice is $3,119. (866) JMC-2BUY