A Study of Export of Diamond Products

CHAPTER - I INTRODUCTION
From time immemorial, India is very well known in the world as the birthplace for diamonds. It has remained the home of diamonds for over two millenniums. It is difficult to trace the origin of diamonds but history says, that in the remote past, diamonds were mined only in India. Diamond production in India can be traced back to almost 8th century B.C. India in fact, remained undisputed leader till 18th century when Brazilian fields were discovered in 1725 followed by emergence of South Africa, Russia and Australia. World famous diamonds such as the Koh-i-noor, The Orloff, The Great Mogul, The Sancy Hope, Florentine, Nassak, Regent, Pitli and the Nizam etc. were produces of India and many of these world famous diamonds were recovered from India in 16th & 17th centuries. It is also said that, India was the sole producer and supplier of diamonds to the world before the discovery of Brazilian fields till the 17th century and the later emergence of South Africa, Russia and Australia, as major producers.

The success story of the Indian diamond industry is unique. From humble beginnings, India rose to become the world leader in a span of just two decades. No other export segment of the country has such a significant share in the world market. It is rightly said, that India has indeed 'democratized' diamonds, which in the past were the exclusive preserve of only the rich and famous. This achievement of the Indian diamond industry was possible only due to the fortuitous combination of the manufacturing skills of the Indian workforce and the untiring and unflagging efforts of the Indian diamantaires, supported by progressive Government policies.

This venture had a cascading effect both on India and on other countries; a great demand was generated for the manufacture of smaller sized diamonds and also for the low cost and high skilled labor that only India could provide. Seeing this, more and more Indian traders migrated to Antwerp to make the most of this opportunity; and gradually Indian

companies also started importing diamonds to India and exported the cut and polished diamonds to countries abroad, which then form a part of diamond jewellery.

Diamantaires processing diamonds than 1 carat

10%

greater

Value Holding: Diamond Cutting

20% 30% 40%

India Belgium USA Rest of World

India 1.2 bn China 0.1 bn Israel 0.4 bn Russia 0.1 bn USA 0.1bn S. Africa 0.1 bn Thailand 0.1 bn Others 0.2bn Belgium 0.1bn

The above graph shows the break-up of the processing expertise of the major diamantaires, clearly showing the status of the Indian diamantaires, the Indian processing expertise since then was in diamonds lesser than 1 carat (upto 7 pts, 7-29 pts and 30+ pts) and even today the Indian diamond traders are the global market leaders, with a rapidly increasing rate of exports (2004-05, US$ 15 bn).

Business Enterprises The area of study of family owned businesses derives its importance from the huge conglomerate of family run organizations which operate in the diamond industry since many generations; the analysis of which would help to internalize the attributes that have helped them achieve the stupendous growth. Family-owned businesses play a crucial role in the economy of most countries. Much of the retail trade, the small-scale industry, and the service sector is run by family businesses. Worldwide, family-managed businesses employ half the world's workforce and generate well over half the world's GDP. In the United States, 24 million family businesses employ 62 per cent of the workforce and account for 64 per cent of the GDP. In India, it is estimated that 95 per cent of the registered firms are family businesses.

Structure, Size and Growth of the Indian Diamond Industry

The Indian diamond industry, similar to its origin, is based more in the villages, towns and cities of Gujarat, where most of the processing facilities are installed; the corporate operations of marketing and finance for all the diamond traders takes place from Mumbai, where all the major traders have their registered offices.

Majority of the diamantaires procure the rough diamonds from the Diamond Trading Company, which holds the maximum share of rough diamonds in the world. The DTC sells its rough diamonds through two channels: in the primary market to preferred clients called Sight holders, the worlds leading diamantaires, carefully chosen for their diamond and marketing expertise; and also form a part of the DTCs Supplier of Choice pro gram; the remainder of the rough diamonds are sold by the DTC in the secondary market worldwide. All the rough diamonds supplied by each of the companies mentioned follow the Kimberley Process Certification as a proof of its purity, identity and place of origin.

Structural Analysis:

The essence of formulating a competitive strategy is relating an industry to its environment. Although the relevant environment is very broad, encompassing social as well as economic forces. The industry structure has a strong influence in determining the competitive rules of the game as well as the strategies potentially available to the firm.

There are, as defined by Michael Porter; Competitive Strategy-1980, five competitive forces (threat of entry, threat of substitution, bargaining power among buyers, of suppliers and the rivalry among current competitors) determine the intensity of industry competition and profitability, and the strongest force or forces governing and become crucial from the point of view of strategy formulation.

(i) Threat of Entry:

Entry barriers are economic and technological forces that prevent outside firms from competing in an industry. These barriers protect existing competitors from outsiders attracted to join the industry, some of whom might be highly diversified and powerful. If entry barriers are low, threats from potential entrants are viable because outsiders can easily come into the industry and increase competition within it. This reduces the total profits industry participants can share. If entry barriers are high, outsiders cannot easily join the industry. This protects the industry and its profits. Entry barriers depend on technological and commercial relationships within the industry. The most important barriers to entry are cost advantages, product differentiation, access to distribution channels, and miscellaneous barriers such as patents and monopolistic control over raw materials.

(ii) Intensity of rivalry among existing competitors:

Competition and profitability within an industry also depend on the intensity of rivalry among existing competitors. Competitive rivalry consists of dynamic moves and countermoves by competitors to attract buyers and capture a larger share of demand. Every time one firm makes a strategic move it can expect its competitors to retaliate. This
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retaliation may take the form of changes in product designs, promotional strategies, packaging, advertising, and prices. Price reduction is a commonly used competitive strategy. However, price wars reduce total industry profits by reducing industry revenues. Thus, fierce rivalry within an industry can be detrimental to its profitability. Rivalry among competitors depends on several factors. They include the number of competitors and their relative power and size distribution, industry growth rate, fixed and storage costs, switching costs, size of capacity augmentation, diversity of competitors, stakes of individual competitors, and exit barriers

(iii) Pressure from substitute products:

Substitute products erode the sales and revenues of the industry. They may even eliminate demand for an industrys product altogether. Industries with products that can be easily replaced by products from other industries are always under revenue and profit pressures (e.g. Ball pens eroding the market of fountain pens, and synthetic diamonds like Cubic Zircon as against the real diamonds). Besides product substitution, another form of substitution (substitution of new raw materials, components, and subassemblies) can create pressure on industry profitability and competition by directly affecting the cost of manufacture.

(iv) Bargaining power of buyers:

Buyer power refers to the ability of purchasers to get favorable terms of trade with sellers. Powerful buyers can get attractive price discounts, better credit terms, better product quality, and more product support services from industry suppliers. Because these concessions are costly, they have the effect of reducing industry profits. Buyers attempt to get the best value for their money, and by so doing they put downward pressure on industry profitability. The power of buyers depends on several factors: buyer concentration, degree of product differentiation, buyer switching costs, access to backward integration, impact of the product on the buyers product quality, and the amount of information available to the buyer.

(v) Bargaining power of suppliers:

Suppliers of raw materials influence industry profitability and competition by affecting the cost of supply. If suppliers are powerful, they can obtain high prices for the raw materials they provide. They may also negotiate favorable terms of trade. They can decide product features, packaging, payment schedule, credit terms, transportation, delivery costs and schedules. The bargaining power of suppliers depends on the same variables that shape the bargaining power of buyers. These include concentration of suppliers, importance of industry to suppliers, threat of forward integration, access to other sources of supply, and the nature of labor supply.

(vi) Size and Growth of the Indian diamond industry

Started in a very small way, the Indian diamond industry has grown multifold since the time it has started exporting. Presented below is a table showing growth of exports over the last 35 years both in terms of caratage and in terms of value) Also grown has the number of countries India has been exporting to; today India exports cut and polished diamonds to almost 20 countries worldwide (refer appendix for the latest export figures), with a growth of 171% over the last ten years. The industry totally employs 13,00,000 people and coupled with its extensive network and global presence; the Indian diamond industry is all set to become a global leader.

(vii) Present Status:

SURAT: Despite grave concerns in the industry over mixing of synthetic lab-grown diamonds with natural diamond parcels, diamantiares have a reason to cheer ahead of the Christmas season. As per the latest figures issued by Diamonds Export Promotion Council (GJEPC), India's polished diamond export has increased phenomenally by 56 per cent year on year to $2.15 billion in October. Majority of the diamonds were exported to the United States, Hong
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Kong and the United Arab Emirates. However, during the first 10 months of the year, India's polished export rose 26 per cent to $18.278 billion.

Interestingly, in the first 10 months of 2013, import of synthetic lab-grown diamonds more than doubled to $62.3 million. Moreover, polished synthetic diamond import also surged 98 per cent to $69 million.

Future Trends in the Indian Diamond Industry

With the exponential growth the industry has achieved over the past years, the future is also equally bright for the Indian diamond industry. The global presence and recognition for Indian diamantaires over the years has been amazing, coupled with the positive vibes the Indian economy (GDP growth, increase in awareness levels) is expecting from the future; India is surely tending to become the global headquarters for diamond and jewellery.

Besides the emerging indicators; the Indian diamond industry also would need to prepare itself for some challenges that might also emerge in the future:

Emergence of China as a manufacturing alternative Greater use of Information technology, the current use if very limited compared to the other industries Need to move from production/ manufacturing orientation to a marketing led business Emphasis on operational and ethical standards to build world class organizations. More investment in employees required, greater abiding to the DTCs Best Practice Principals (BPP) Co-ordination amongst all stakeholders producer, manufactures and retailers to protect and increase diamond industry reach Forward integration into brand building (B2C segment) very much required for all leading diamantaires Reduction in credit period, Indian diamantaires offer the largest credit period in the world to their buyers Growing demands of the single-channel supplier (the DTC), increasing rough prices
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Saturation of the US & European retail industries, newer markets need to be tapped Productivity levels in diamond processing need to be increased as newer players like Sri Lanka and Thailand are also entering in the small carat segment Investment into greater use of technology, better jewellery designs and into research and development.

India has been one of the most important countries for the production of Diamond. One of the highlights is the production of Studded Diamond Jewllery. Studded Diamond Jewellery trading in India is age old as it is established by the fact that in 1650 A.D., sources report the employment of more than 60,000 workers in the Eluru mines, where they dug and washed the precious stones. Today though India has almost no raw Studded Jewllery left within her own soil still we produce 70% of the World gems in terms of quantity and 45% in terms of value. India is the original country which discovered gems and initiated gem craft. The gems produced here gave birth to a fabulous industry and global trade.

Indian Diamond Industry has achieved a premier position in the International market. Today India has been recognized as a significant manufacturing exporting center apart from its traditional strengths in handmade jewellery, the country has niche for itself in machine made commercial jewellery arena. The export industry has come of age and is now entering a new phase of development. Gearing up to achieve further growth, the industry has already captured a 55% share of world market by the turn of this century. India is a primary source of imports for the developed countries, mainly because of abundant availability of skilled and cheap labor, but now this no longer remains the competitive edge for India as heavy competition is faced by various countries like China, Thailand and Sri Lanka. But at the same time, India has managed to keep its position healthy and have brighter prospects ahead.

CHAPTER - II OBJECTIVES

To review the present status of the Indian Diamond Sector & Analyze its contribution to the economy. To critically evaluate the export performance of Diamond sector over the years and its share in the global trade in Diamond To study about the competitive position of Diamond export. To find out who is better potential importers of Indian Diamond product. To analysis the vital steps for improving the Diamond export. To understand the importance and effectiveness of export in present market situation.

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CHAPTER III CONCEPTUAL STUDY INTRODUCTION

Diamonds have been a source of fascination for centuries. They are the hardest, most imperishable, and the brilliant of all precious stones. Diamond is a mineral a naturally crystalline substance the transparent form of pure carbon. It is indomitable, the hardest surface known. This King of Gems symbolizes purity and strength. Diamond is for engagement and the 75th wedding anniversary, for a commitment to never ending love. The word diamond comes from the Greek word adamas, meaning unconquerable. The formation of these exotic diamonds began very early in the earths history. After being formed in the interiors of the earth, the diamonds were shot to the surface by extraordinary volcanoes. A diamond is likely the oldest thing you will ever own, probably 3 billion years in age, fully two thirds the age of the Earth.

Out of every batch of 10 diamonds made in the world, 7.5 are made in India. It shows that India has established itself as the world's largest diamond processing center. In India, the diamond processing units are mainly located in Gujarat, particularly in Surat, Navsari and some parts of Saurashtra & north Gujarat region. About 80% of country's diamond processing work is being done in Gujarat, out of which more than 50% is conducted at Surat only. The diamond processing industry in India, thus, is quite unique as it is developed at one location in an industrial cluster. Surat city is known as diamond city of India.

The Industry comprises of about 2000 units of cutting & polishing out of which about one third are located in Surat. IT employs about 15 lakh people directly and provides employment opportunities to more than 25 lakh people. Their wage bill comes to Rs. 1500 crore per annum. An investment of Rs. 5 crore in this sector creates an employment for 1000 people. The industry is, thus, a major employer.

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The processing capacity of each unit ranges from 4 to 400 carats, while production capacity depends on the type, shape and size of the diamond; it also depends on the skill of the workers. There are about 7000 different types of diamonds. The processing is done through ingeniously manufactured and manually operated machines.

HISTORY OF DIAMONDS

It is believed that the history of diamonds originates in India. Several thousands of years ago, before there was any definite indication that diamonds were rare or valuable enough to kill for, the ancient scriptures in India have described them as one of the nine stones of the Navratna, that are linked to the nine planets. The puranas also describe means of testing the worth of various precious stones.

From myths about valleys of diamonds protected by snakes, to the production of millions of carats in rough diamonds each year, the history of diamonds is one of mystical power, beauty and commercial expertise. The stages in the history of diamonds are as follows:-

EARLY HISTORY

The first recorded history of the diamond dates back some 3,000 years to India, where it is likely that diamonds were first valued for their ability to refract light. In those days, the diamond was used in two ways-for decorative purposes, and as a talisman to ward off evil or provide protection in battle.

DARK AGES

The diamond was also used for some time as medical aid. One anecdote, written during the Dark Ages by St Hildegarde, relates how a diamond held in the hand while
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making a sign of the cross would heal wounds and cure illnesses. Diamonds were also ingested in hope of curing sickness.

MIDDLE AGES

During the Middle Ages more attention was paid to the worth of diamonds, rather than the mystical powers surrounding them. The popularity of diamonds surged during the Middle Ages, with the discovery of many large and famous stones in India, such as the Kohinoor and the Blue Hope. Today India maintains the foremost diamond polishing industry in the world.

RECENT TIMES

During the mid-nineteenth century, diamonds were also being discovered in eastern Australia. However, it was not until late 1970's, after seven years of earnest searching, that Australia's alleged potential as a diamond producer was validated. On October 2nd 1979, geologists found the Argyle pipe near Lake Argyle: the richest diamond deposit in the world. Since then, Argyle has become the world's largest volume producer of diamonds, and alone is responsible for producing over a third of the world's diamonds every year.

DIAMOND INDUSTRY

The diamond industry can be broadly separated into two basically distinct categories: one dealing with gem-grade diamonds and another for industrial-grade diamonds. While a large trade in both types of diamonds exists, the two markets act in dramatically different ways.

Diamond Industry

13

Gem Diamond Industry

Industrial Diamond Industry

14

GEM DIAMOND INDUSTRY:

A large trade in gem-grade diamonds exists. Unlike precious metals such as gold or platinum, gem diamonds do not trade as a commodity: there is a substantial mark-up in the sale of diamonds, and there is not a very active market for resale of diamonds. One hallmark of the trade in gem-quality diamonds is its remarkable concentration: wholesale trade and diamond cutting is limited to a few locations (most importantly New York, Antwerp, London, Tel Aviv, Amsterdam and Surat), and a single companyDe Beerscontrols a significant proportion of the trade in diamonds. They are based in Johannesburg, South Africa and London, England.

INDUSTRIAL DIAMOND INDUSTRY:

The market for industrial-grade diamonds operates much differently from its gemgrade counterpart. Industrial diamonds are valued mostly for their hardness and heat conductivity, making many of the gemological characteristics of diamond, including clarity and color, mostly irrelevant. This helps explain why 80% of mined diamonds (equal to about 100 million carats or 20,000 kg annually), unsuitable for use as gemstones and known as bort, are destined for industrial use. In addition to mined diamonds, synthetic diamonds found industrial applications almost immediately after their invention in the 1950s; another 400 million carats (80,000 kg) of synthetic diamonds are produced annually for industrial usenearly four times the mass of natural diamonds mined over the same period.

The dominant industrial use of diamond is in cutting, drilling, grinding, and polishing. Most uses of diamonds in these technologies do not require large diamonds; in fact, most diamonds that are gem-quality except for their small size, can find an industrial use. Diamonds are embedded in drill tips or saw blades, or ground into a powder for use in grinding and polishing applications. Specialized applications include use in laboratories as containment for high pressure experiments, high-performance bearings, and limited use in specialized windows.

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DIAMOND SUPPLY CHAIN:

The diamond supply chain is controlled by a limited number of powerful businesses, and is also highly concentrated in a small number of locations around the world. In fact, the amount of power which De Beers has consolidated historically prevented it from direct trade with the United States,. The concentration of power only loosens at the retail level, where diamonds are sold by a limited number of distributors, known as sightholders, to jewelers around the world.

SOURCES:

Historically diamonds were known to be found only in alluvial deposits in southern India; India led the world in diamond production from the time of their discovery in approximately the 9th century BCE to the mid-18th century CE, but the commercial potential of these sources has been exhausted. The first non-Indian diamond source was found in Brazil in 1725. Today, most commercially viable diamond deposits are in Africa, notably in South Africa, Namibia, Botswana, the Democratic Republic of Congo, Angola, Tanzania and Sierra Leone.

MINING:

Only a very small fraction of the diamond ore consists of actual diamonds. The ore is crushed, during which care has to be taken in order to prevent larger diamonds from being destroyed in this process and subsequently the particles are sorted by density. Nowadays, the diamonds are located in the diamond-rich density fraction with the help of X-ray fluorescence, after which the final sorting steps are done by hand. Before the use of X-rays became commonplace, the separation was done with grease belts; diamonds have a stronger tendency to stick to grease than the other minerals in the ore.
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DISTRIBUTION:

The Diamond Trading Company, or DTC, is a subsidiary of De Beers and markets rough diamonds produced both by De Beers mines and other mines from which it purchases rough diamond production. DTC performs sophisticated sorting of rough diamonds into over 16,000 categories, and then sells bulk lots of rough diamonds to a limited number of sightholders a few times a year.

Once purchased by sightholders, diamonds are cut and polished in preparation for sale as gemstones. Diamonds which have been prepared as gemstones are sold on diamond exchanges called bourses. There are 24 registered diamond bourses. This is the final tightly controlled step in the diamond supply chain; wholesalers and even retailers are able to buy relatively small lots of diamonds at the bourses, after which they are prepared for final sale to the consumer. Diamonds can be sold already set in jewelry, or as is increasingly popular, sold unset ("loose").

COMPOSITION

Diamond is carbon in its most concentrated form. Except for trace impurities like boron and nitrogen, diamond is composed solely of carbon, the chemical element that is fundamental to all life.

But diamond is distinctly different from its close cousins the common mineral graphite and lonsdaleite, both of which are also composed of carbon. Why is diamond the

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hardest surface known while graphite is exceedingly soft? Why is diamond transparent while graphite is opaque and metallic black? What is it that makes diamond so unique?

The key to these questions lie in a diamonds particular arrangement of carbon atoms or its crystal structure-the feature that defines any minerals fundamental properties. A crystal is a solid body formed from the bonding of atomic elements or compounds in a repeating arrangement.

CUT

Though India was known to have diamond mines many centuries ago - the fabulous Kohinoor is an Indian diamond - it has virtually no mines today. However, India has continued to maintain its tradition of diamond cutting and thousands of people are involved in this skilled occupation. The cut of a diamond refers to its proportions. Of the 4Cs the cut is the aspect most directly influenced by man. The other 3 are dictated by nature.

India has a large labor force and this has made the country the biggest diamond cutting center for small roughs. Indeed, were it not for Indian workers, many of these small diamonds would be put to industrial use rather than jewelry.

Diamond cutting and polishing workshop in Bombay.

A diamond in its natural, uncut state is described as a "rough diamond". Its natural appearance so resembles a glass pebble that most people would pass it by without a second glance. It is the skill of the diamond cutter that unlocks the brilliance for which diamonds are renowned.
An uncut diamond

If two identical diamonds are placed side by side and one is

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less brilliant and fiery than the other, the fault lies in the cutting. Such a stone cannot demand as high a price as a well-cut diamond. Quite often the cut of a diamond is confused with its shape. Diamonds are cut into various shapes depending upon the original form. Whatever the shape, a well cut diamond is better able to reflect light. A diamonds ability to reflect light determines its display of fire and brilliance. Diamonds are usually cut with 58 facets, or separate flat surfaces. These facets follow a mathematical formula and are placed at precise angles in relation to each other. This relationship is designed to maximize the amount of light reflected through the diamond and to increase its beauty.

TYPES OF CUTS: Well Cut: When a diamond is cut to proper proportions, light is reflected from one facet to another and then dispersed through the top of the stone. Within the well cut standards are the sub-categories of Ideal, Excellent &Very good. Deep Cut: Then the cut of a diamond is too deep some light escapes through the opposite side of the pavilion. Shallow Cut: When the cut of a diamond is too shallow, light escapes through the pavilion before it can be reflected.

SHAPES RELATIVE SIZES Carat Sizes Round Emerald Marquise Pear

0.50

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0.75

1.00

KINDS OF DIAMONDS

Ideal: This range is very strict and combines the best in brilliance and fire. Technically, the head of the class.

Excellent: This range is also of great beauty yet slightly more flexible regarding percentages. Many experts prefer the appearance of this range to ideal.

Very Good: This range is balanced between precise proportions and price considerations. Viewed by many as the best overall value in beauty and price. Think of Ideal, Excellent and Very good as rings in a bulls eye. These classifications for cut represent an acceptable range for that category. The ranges narrow as you move toward Ideal at the center. Ideal has the narrowest range, with excellent slightly larger and Very Good the largest. All three of these categories fall within the well cut classification. In many cases the visual differences from one classification to the next are so small they may be indiscernible to the naked eye.

The cut, or proportions, of a diamond is measured in percentages relative to the diameter of its girdle. The girdle diameter of each diamond is always considered 100%. Example: The girdle of a diamond measures 10 millimeters (100%) the table measures 5.6 millimeters. The total depth measurement is 6.1 millimeters. The diamond would be described as having a table of 56% and a depth of 61%. The table and the depth are the key to determining good proportions.

COLOR
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Our standard conception of diamond is as a colorless stone. The best color is no color. Diamonds allow light to be reflected and dispersed as a rainbow of color. Diamonds are graded into categories defined by letters from D to Z. The color range from exceptional whites (categories D, E and F) to tinted colors (categories M to Z). The best way to pinpoint a diamond's true color is to place it next to another diamond that has previously been graded. It is often surprising to learn that diamonds also occur by rare accidents of nature in shades of pink, blue, green, amber, or even red. These rarely occurring colors are referred to as fancies and are evaluated by a different set of color standards. Fancy colored diamonds are the most expensive because of their extreme rarity. Some fancy colors can cost hundreds of thousands of dollars for diamonds of one carat or less! The yellow color in diamonds comes from trace amounts of nitrogen.

One part in a million will cause a yellow tint to appear in the K color diamond. As a rule, the more yellow the stone, the less value it has. There's a good reason for this. The yellower the stone, the less sharp and sparkly it appears. A whiter stone lets greater amounts of light pass through it, making it sparkle and shine. Chemically-pure, a perfect crystal of diamond is colorless, but adds a little nitrogen and yellow appears. Add boron instead and a blue diamond results. Colored diamonds are hot, both in the market place and in science.

Color Grading Scale

DEF

GH

I J

K L Faint Yellow

M-Z Light Yellow

Z+ Fancy Yellow

Colorless Near Colorless

CLARITY Almost all diamonds contain very tiny natural birthmarks known as inclusions. To determine diamonds clarity, an expert views it under 10 power magnifications. In addition to internal inclusions, surface irregularities are referred to as blemishes. These two categories of

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imperfections-inclusions (internal) and blemishes (external) - make up clarity. The fewer the imperfections, the rarer and more valuable the diamond. Many inclusions are not discernable to the naked eye and require magnification to become apparent. Contrary to the popular belief, higher clarity does not always mean more beautiful. If the inclusions are not visible to the naked eye, a higher clarity does not really improve the appearance of a diamond but rather the rarity and price. A higher clarity is more desirable and valuable.

Like color, clarity is also categorized using international grading. Clarity is graded using a very precise and complex method of evaluating the size, location, and visibility of inclusions. Alongside is the technical clarity scale with a description of each term.

Diamonds are clarity graded face up (looking at the top of the diamond), not from the side or bottom of the diamond. We have the most problem with clarity where the inclusions are not visible with the eye from the top of the diamond but are visible from the side. When viewing a diamond from the side, the middle third of the diamond is generally very transparent.

If an inclusion is in this part of the diamond and happens to be turned broadside to your view, it can be much more visible than when viewed from the top where there are many facets to hide its appearance. If the diamond is going to be visible from the side in the setting, make sure your diamond is clean to the eye from the top and the side, regardless of what clarity grade it has.

CARAT WEIGHT

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A carat is the unit of measure used to determine the weight of a diamond. The term "carat" is derived from the original method of using carob tree seeds to weigh diamonds. One seed from this tree was equivalent to one carat. The actual weight of one carat is now established at 0.2 grams. To assist in accurately describing the weight of diamonds each carat is divided into 100 points. Diamonds of less than one carat in weight are known as "pointers". For example, a 0.15-carat diamond would be called a "15 pointer".

Diamonds are usually weighed prior to setting for more accurate measurements. Diamonds are priced per carat, according to their size and quality. Although the carat weight of a diamond is indicative of its size, it is not necessarily indicative of a diamond's quality. Therefore, where two diamonds have the same carat weight, the one of better quality will command a higher price per carat

CLEANING

Although it is not one of the four Cs, cleanliness affects a diamond's beauty as much as any of the four Cs. A clean diamond is more brilliant and fiery than the same diamond when it is "dirty." Dirt or grease on the top of a diamond reduces its luster. Water, dirt, or grease on the bottom of a diamond interferes with the diamond's brilliance and fire. Even a thin film absorbs some light that could have been reflected to the person looking at the diamond. Colored dye or smudges can affect the perceived color of a diamond. Historically, some jewelers' stones were misgraded because of smudges on the girdle, or dye on the culet. Current practice is to thoroughly clean a diamond before grading its color.

Cleanliness does not affect the diamond's market value, as any competent jeweler will clean the diamond before offering it for sale. However, cleanliness might reflect a diamond's sentimental value: some jewelers have noted a correlation between ring cleanliness and marriage quality

A beautiful diamond is one that successfully maximizes the following beauty factors:
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Brilliance - The total amount of white light, both external and internal, returned from the diamond to the eye of the observer. Scintillation - Reflections and flashes of white light from the diamond's surface as the diamond, observer or light source moves.

Dispersion - The dispersion of white light into its component spectral colors.

Light Return Geometry - The "kaleidoscope" effect or spatial pattern of the diamond, which is pleasing to the eye due to degrees of symmetry.

Perceived Symmetry - The symmetry as seen by the eye, whereby all facets are well proportioned.

CERTIFICATION

Before purchasing a diamond, you should expect to review a copy of its certificate, as this is your only guarantee of the quality and value of that diamond.

What's in a Certificate?

A diamond certificate, also called a diamond grading report, diamond dossier or diamond quality report, is a report created by a gemologist, or gemologists, who have scrutinized the diamond and placed it under a microscope to analyze its dimensions, clarity, cut, color, finish, symmetry, and other characteristics.

The most important step in choosing a diamond is reviewing the diamond certificate, referred to by diamond grading labs as a grading report. A grading report documents the characteristics of a diamond, like the four Cs. Before purchasing a diamond, review a copy of its grading report, as this is your guarantee of quality for that diamond. Learn more about the diamond grading report
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SHAPES

Diamonds are cut in many different and exciting shapes. The shape of a diamond is often confused with its cut. Shape refers to the basic form of the diamond: oval or pear shaped, for instance. Cut or proportions, on the other hand, refer to the ability of each of these shapes to reflect light. A round diamond, for example, could have a good cut or a poor cut depending upon its proportions. When it comes to shape, it is simply a matter of personal taste. The right shape for you is really the one whose appearance you prefer. Shape can be a statement of whom you are; like other areas of fashion, shape can reflect your individuality. The most popular shapes are displayed here, but many new and interesting shapes are being developed every year.

TYPES OF DIAMONDS

SYNTHETIC DIAMONDS

Synthetic diamonds are artificial diamonds that have been created in a laboratory. By varying the heat and pressure during formation, adding foreign elements, and irradiating the finished crystals, synthetic diamonds can be made to imitate natural colored stones. There is currently a wide spectrum of synthetic colored diamonds available. The main difference between naturally-formed diamonds and synthetic diamonds is that synthetic diamonds usually have higher concentrations of impurities, such as nitrogen, and remnants of metal catalyst.

TREATED DIAMONDS

Treated diamonds are natural diamonds that started out with an unappealing or slightly off color. By exposing these less desirable stones to the same high-tech alchemy used to create synthetic colored diamonds, the apparent color and appearance of these
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diamonds can be significantly improved. Recently we have seen treated diamonds with vibrant yellowish green, red and blue colors enter the market. NATURAL FANCY COLOUR DIAMONDS

Natural fancy color diamonds are significantly more valuable and rarer than comparable treated or synthetic stones. Although treated and synthetic diamonds can be beautiful in their own right, the origin of their color should be fully disclosed by the seller. They should also cost significantly less than natural diamonds. Ethical practice and the law require that synthetic gemstones and treatments be fully disclosed to consumers. Unfortunately, this does not always happen. As always, be careful!

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SUMMARY
The Indian Diamond Industry is currently going through a downturn phase. The total exports of cut and polished diamonds during FY 2011-12 and 2012-13 (Apr-Dec) witnessed decline of 17% and 36% respectively. USA is the major market for diamonds as exports to USA are pegged at US$ 6.1 billion higher than that from Belgium and Israel. Though the diamond sales have bottomed out, the industry is expected to witness positive growth in festive months during October-December 2013.

Our share in USA has started declining; the industry strongly believes that USA will continue to be a strong global trading partner. Of lately, there have been reports that China, through governmental interactions and aids, is pushing through direct deals with the African governments for the supply of rough diamonds which would put it in a strong position to merge as a major diamond manufacturer in the world. Dubai has started strongly emerging as global diamond trading centre. Sharing these concerns and to protect the genuine interest of the diamond industry, the Honble Minister directed the Department of Commerce to constitute a Task Group for Diamond Sector to suggest measures to increase the diamond trade and to make India an International Trading Hub for Rough Diamonds.

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ANALYSIS TABLE 1
Export Performance of Cut and Polished Diamonds in India for the year (2008-2013) YEAR SALES US $ Million 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 10356.7 15634.5 19631.6 23318.94 17418.23

Source: CMIE Report

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CHART - 1
Export Performance of Cut and Polished Diamonds in India for the year (2008-2013)

SALES US $ Million
25000

20000

15000 SALES US $ Million 10000

5000

0 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013

INTERPRETATION
The above table and chart shows the export performance of Cut & Polished Diamonds in India for the period 2008-2013. The export was highest in the year 20112012(i.e) 23318.94 US $ Million while compared to other year. Hence there was a continuously increases of Cut and Polished diamonds export performance in India. But there is a slash in the export of current year the chart shows that the sales has been decreased from 2011-2012.

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TABLE 2 Growth Rate for Export Performance of Gems and Jewellery in India (2008-2013) YEAR 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 Source: CMIE Report VALUE US$ 0 9.8 19.8 50.96 25.57

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CHART 2 Growth Rate for Export Performance of Gems and Jewellery in India (2008-2013)

VALUE US$
60 50 40 30 20 10 0 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 VALUE US$

INTERPRETATION The above table and chart shows the growth rate for Export performance of Cut and Polished Diamonds in India. There was an upward and downward movement in the Export performance. In the year 2010-2011 the growth rate was 50.96 and later in the year 20112012 it shows the decreasing growth rate (i.e.) 25.57.

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TABLE 3

Trend Projected for Export Performance of Gems and Jewellery in India (2013-2018) YEAR 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 VALUE IN US$ 19600.79 21448.52 23296.25 25143.98 26991.71

Source: CMIE Report

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CHART 3

Trend Projected for Export Performance of Gems and Jewellery in India (2013-2018)

VALUE IN US$
30000 25000 20000 15000 10000 5000 0 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

VALUE IN US$

INTERPRETATION The above table and chart shows the trend movement of gems and jewellery for the period 2013-2018. The trend value which shows highest in the year 2017-2018 (i.e.) US$ 26991.71 while compared to other years. Hence there will be a continuous increasing of the export performance of gems and jewellery in India.

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TABLE - 4 Country Wise Performance of Export of Cut and Polished Diamonds in the year 2013

Country Name : Japan S.No. 1. 2. 3. 4. 5. 6. 7. 8. Year Values in US$ Million %Growth Total export of commodity %Growth %Share of country (1 of 3) Total export to country %Growth %Share of commodity (1 of 6) 7.47 18.41 146.64 0.05 20082009 20092010 0.01 20102011 0.02 118.89 2.31 -87.44 0.85 3.39 46.69 1.53 -54.92 3.93 20112012 20122013 0.06

3,025.70 3,629.54 5,091.24 6,328.54 6,100.06 19.96 0.00 40.27 0.00 24.30 -3.61 0.00

Source : Gjepc

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CHART 4

Country Wise Performance of Export of Cut and Polished Diamonds in the year 2013Japan

Total export to country [Japan]

3,025.70 3,629.54 2008-2009 2009-2010 6,328.54 5,091.24 2010-2011 2011-2012 2012-2013

6,100.06

INTERPRETATION The above table and chart shows the export of cut and polished diamonds to Japan from India from the period 2008-2013. The value which shows highest in the year 2011-2012 (i.e.) US$ 6,328.54 while compared to other years.

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TABLE - 5 Country Wise Performance of Export of Cut and Polished Diamonds in the year 2013

Country Name : China

S.No. 1. 2. 3. 4. 5. 6. 7. Year Values in US$ Million %Growth Total export of commodity %Growth %Share of country (1 of 3) Total export to country %Growth 20082009 0.03 7.47 20092010 20102011 0.07 2.31 -87.44 3.10 20112012 0.15 109.61 3.39 46.69 4.44 20122013 0.15 -2.19 1.53 -54.92 9.63

18.41 146.64

0.34

9,353.50 11,617.88 15,482.70 18,076.55 13,534.88 24.21 33.27 16.75 -25.12

Source : Gjepc

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CHART 5

Country Wise Performance of Export of Cut and Polished Diamonds in the year 2013China

Total export to country [China]

13,534.88 9,353.50 11,617.88 18,076.55 15,482.70 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013

INTERPRETATION The above table and chart shows the export of cut and polished diamonds to China from India from the period 2008-2013. The value which shows highest in the year 2011-2012 (i.e.) US$ 18,076.55 while compared to other years. There is a decrease in the between the year 2011-2012 and 2012-2013.

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CONCLUSION

Based on the study it shows that there is a continuous increase in the export of diamond in India. Diamond Industry plays vital role in the development of an economy. It can expanded its markets in the global economy and can be recognized as a global to the exporters of the other countries and prove to be equally good in the export. Government must liberalize the custom duties and procedures. The government has to encourage the domestic exporters and help them to export their product in International Market. The exporter of Gems and Jewellery must know the procedures to be followed in the export.

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BOOKS REFERRED International Marketing Management - Francis Cherilum Research Methodology - C.R. Kothari International Trade Francis Cherilum

JOURNAL CMIE Report NOTES AND REFERENCE Government of India (2013), The Sparkle of Success: The Indian Gem and Jewellery Industry, Gem and Jewellery Export Promotion Council, Ministry of Commerce and Industry, Government of India, New Delhi. Export Import Bank (2013), Indian Gem and jewellery: A Sector Study, Occasional Paper no. 138, Quest Publications, Mumbai, Online from http:// www.eximbankindia.com/op138pdf. Ishita Mukherjee (2008), Gems and Jewellery Industry: Global and Indian Scenario, The Icfai University Press, Hyderabad. DAVOS (2013), Gems and Jewellery, IBEF Report January 25-29, Available from http://www.ibef.org/download/Gemsandjewellery_setoral.pdf

WEDSITES

WWW.Google.com WWW.Yahoo.com WWW.cmie.com www.gjepc.com www.commerce.nic.in

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