A Study of Export of Diamond Products

1. Introduction and Research Design 1. 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 program; 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.

Industry Structure Analysis of the Indian Diamond Industry

SWOT Analysis of the Indian Diamond Industry: SWOT analysis is the overall evaluation of an industrys Internal Environment (strengths and weaknesses), and External Environment (opportunities and threats) to understand the present status of the company and use it as an aid in strategic planning.

The Internal Environment: The internal environment analysis comprises of the evaluation of a companys strengths and weaknesses, with a view to analyse its current status and the areas where it can correct or strengthen itself. The strong areas of the Indian Diamond Industry include the large workforce of skilled craftsmen (about 800,000), lowest manufacturing and labour costs, a well-distributed marketing network and supportive governmental policies

Weaknesses of the Indian Diamond Industry include areas where it can correct itself, such as low levels of productivity as compared to places like China, huge stocking of inventory and thus handling costs and high working capital to be maintained.

The External Environment: The analysis of the external environment is related to the opportunities and threats that the industry should be prepared for.

The opportunities the Indian diamond industry could utilize include the growing domestic demand for diamond jewellery and tapping potential newer markets in Europe and Latin America

The threats facing the Indian Diamond Industry include the entry of countries such as China, Sri Lanka and Thailand in the small-sized diamond segment, the over dependence on single-channel suppliers such as the Diamond Trading Company (DTC, the marketing arm of the De Beers Group) and most importantly, the emergence of newer substitutes such as synthetic diamonds (cubic zircon, HPHT etc.) which are much cheaper than the real diamonds.

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.

The goal of competitive strategy for an industry is to find a position in the industry where it can best defend itself against these competitive forces or can influence them in its favour.

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 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 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 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.

1.2 Statement of the Problem

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.

1.3 Objectives of the study

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.

1.4 Period of the Study

The Study on export of diamond jewellery is carried out for the period from 2008-2009 to 2012 - 2013

1.5 Scope of the Study

The scope of this project includes the current scenario, factors affecting the Diamond export and other factors such as the legal aspect, process involved in export, market potential, international laws governing export. Apart from these I am also evaluating the cost involved to accomplish my goal.

1.6 Methodology
A year long research is divided into two sub researches: Exploratory & Conclusive Exploratory Research Design: (a) Literature survey: Extensive literature survey was carried out to get insight into the Gems & Jwellery Industry in India, Surat Cluster of Diamond industry, its structure, growth and characteristics. Literature survey also gave broad idea of industry organization innovations in Surat cluster of Diamond Industry. Various sources of secondary data used are: Prism (Gems & Jwellery Export Promotion Council, Mumbai), Diamond World (International Journal House, Jaipur), Diamond Samrajya(Surat Diamond Association, Surat), Diamond Handbook of Surat (Gems & Jewellery Information Center, Jaipur) Saket Industrial Digest (Ahmedabad), Business Magazines Books (b) Experience survey: In-depth personal interviews of experts with a non-structured questionnaire method was undertaken of the following experts: Director, Indian Diamond Institute, Surat; Director, Gujarat Diamond Training Institute, Ahmedabad; Chief Editor, Diamond Samrajya, Surat; President, Gujarat Chamber of Commerce & Industry, Surat Chairman, Gems & Jwellery Export Promotion Council, Mumbai Conclusive Research Design:

(a) Story building:

Personal interviews, Company record & literature, Published information were used to develop stories/ cases.

40 units were identified as sample for data collection. Samples were selected on judgmental basis from Diamond processing industry in south Gujarat Surat, Navsari, Vyara districts. Local experts and Industry Association office bearers were asked to identify units, which were highly Pioneering Innovative on their judgment. 40 cases were compiled on the information collected out of which 36 were included in the analysis. Eligibility criterion to include a case was that the case should contain information about at least 5 decisions, which fall into at least major areas of enterprise creation and management.

Data collection instrument was structured questionnaire with open-ended questions. Personal interviews allowed probe and collection of information, which was quite difficult to gather because of limited comprehensibility of the entrepreneurs.

(b) Content analysis and scoring:

Each case was content analyzed and the decisions with relatively high discretionary content were listed. These decisions served as a basis for inferring the managerial heuristics involved.

Sources of Data
The system of collecting data for research projects is known as research methodology. The data may be collected for either theoretical or practical research for example management research may be strategically conceptualized along with operational planning methods and change management. Some important factors in research methodology include validity of research data, Ethics and the reliability of measures most of your work is finished by the time you finish the analysis of your data. Formulating of research questions along with sampling weather probable or non probable is followed by measurement that includes surveys and scaling. This is followed by research design, which may be either experimental or quasi-experimental. The last two stages are data analysis and finally writing the research paper, which is organized carefully into graphs and tables so that only important relevant data is shown. Types of Research Methods

Qualitative Quantitative Mixed Critical and action oriented

Tools and Techniques

Data Collection Secondary Source: Those, which have already been collected by someone else and which have already been through, the statistical process and thus are available on internet sites and any other media for that matter. The secondary data will be collected from internet and references from Library. Data Analysis: The data were analysed through Trend analysis technique using SPSS statistical software for a suitable forecasting model based on export data. Graphs and tables will be used for presentation of the data and findings to make it apparent and understandable. Data collected from various sources and were edited and tabulated. Analysis of data is done by using statistical techniques like.

* Trend Analysis * Growth Rate

Limitations of the Study

Lack of available and/or reliable data

A lack of data or of reliable data will likely require you to limit the scope of your analysis, the size of your sample, or it can be a significant obstacle in finding a trend and a meaningful relationship. You need to not only describe these limitations but to offer reasons why you believe data is missing or is unreliable. However, dont just throw up your hands in frustration; use this as an opportunity to describe the need for future research.

Lack of prior research studies on the topic

Citing prior research studies forms the basis of your literature review and helps lay a foundation for understanding the research problem you are investigating. Depending on the currency or scope of your research topic, there may be little, if any, prior research on your topic. Before assuming this to be true, consult with a librarian! In cases when a librarian has confirmed that there is a lack of prior research, you may be required to develop an entirely new research typology. Note that this limitation can serve as an important opportunity to describe the need for further research.

Measure used to collect the data

Sometimes it is the case that, after completing your interpretation of the findings, you discover that the way in which you gathered data inhibited your ability to conduct a thorough analysis of the results. For example, you regret not including a specific question in a survey that, in retrospect, could have helped address a particular issue that emerged later in the study. Acknowledge the deficiency by stating a need in future research to revise the specific method for gathering data.

Self-reported data

Whether you are relying on pre-existing self-reported data or you are conducting a qualitative research study and gathering the data yourself, self-reported data is limited by the

fact that it rarely can be independently verified. In other words, you have to take what people say, whether in interviews, focus groups, or on questionnaries, at face value. However, selfreported data contain several potential sources of bias that should be noted as limitations: (1) selective memory (remembering or not remembering experiences or events that occurred at some point in the past); (2) telescoping [recalling events that occurred at one time as if they occurred at another time]; (3) attribution [the act of attributing positive events and outcomes to one's own agency but attributing negative events and outcomes to external forces]; and, (4) exaggeration [the act of representing outcomes or embelishing events as more significant than is actually suggested from other data].

Chapter Scheme
The present study is divided in to five chapters. Chapter wise brief narration is as under:

The first chapter deals with the introduction, and the design of the study. It covers matters such as introduction, statement of the problems, the scope and objectives of the study, the methodology, and operational definition of concepts, the tools of analysis and the chapterisation.

The second chapter deals with Review of literature

The third chapter examines the theoretical framework of the diamond and diamond industry.

The fourth chapter presents the export analysis from various secondary sources

The fifth chapter presents the summary of findings and the suggestions and conclusion of the project.

CHAPTER II REVIEW OF LITERATURE

The Indian Diamonds have passed through different phases, and have been influenced by different religious and cultural streams. The rich tradition craft is still relevant in the Indian household, and in many communities the use of craft is for artistic pursuits and as a source of occupation. Review of literature is the most simple and fruitful basis of formulating the research problems precisely. For this purpose the research has to review the works already done by the others. Relevant bibliographical reviews of studies are most useful to the researcher for formulating the problems precisely. Knowledge can also be acquired through studying some standard books, magazines and journals on the subject. It helps in understanding the problem well and creates awareness of technical terminology to be used in the study. Keeping in view the objective of study, the following literatures have been reviewed for its consideration. Literature related with the Diamonds industry can be broadly grouped in the following manner: (i) Literature relevant with the marketing aspects of Diamonds products. (ii) Attempts related with the role of Diamonds industry in the countrys economy. (iii) Literature related with the problems and prospects of the Diamonds sector. Chandra, Rai Govind (1979) in his study made an attempt to disentangle the Greek and Indian forms of jewellery and studied the various forms which developed out of the contact of these two great people of ancient heritages who had both received and absorbed Achemenid impulses. The love of the Indian for ornament is proverbial and therefore this was the most fertile field where ideas of these two people -the Greeks and Indians- could mingle and take a new form. In his study, apart from examining the jewellery subjectively, an effort has been made to correlate the actual pieces found during the various explorations and excavations with those seen on the Gandhara sculptures.

Verma, Manohar Lall (1983) studied that a majority of the exporters in Indian diamond industry are facing various problems. The import of raw materials is the biggest

problem for diamond manufacturers. He analysed that low quality and high prices of raw materials are the main problems of this industry that have been faced by the exporters. Lack of training institutes, little use of modern techniques and many others problems are in this industry. On the other hand, Verma stated that diamonds are the single largest export commodity earning foreign exchange. In his study he reported that in period of five years from 1979 to 1983, diamond imported by the USA from India rose from 33 per cent to 48 per cent and diamonds imported by Japan from India increased from 36 per cent to 50 per cent. Purushothaman, Nair C. N. (1992) highlighted the export potential and problems of diamond industry. He told that the diamond industry is considered to be a member of the traditional industry group. Diamond industry in India is making larger contribution to our export earnings year after year. In terms of value the export earnings from diamonds were Rs. 44.8 crores in 1970-71 and Rs. 618.40 crores in 1980-81. He told that India is neither a source nor a market for diamonds, but only an intermediate processor, which imports rough stuff to be almost entirely exported after processing. He discussed various problems faced by the diamond industry in special reference to Kerala such as supply of poor quality stones, poor bank facilities, labour problem and arbitrary pricing etc. In the end he offered some suitable policy implications to get rid of various problems that have been faced by the diamond industry. Kapadia, Karin (1995) discussed the system of debt bondage in the gem-cutting industry of south India. Evidence is examined from intensive fieldwork in villages in Tamilnadu; one large village in particular, which has been a major centre in the synthetic gem-cutting industry for seventy years. Here bonded labour is part of a dynamic and

capitalist small scale industry that is rapidly expanding into global markets. Untracht, Oppi (1997) explained that far more than merely a display of wealth and taste, jewellery is an integral element in the lives of the people of India. Untracht in his study observed major Indian jewellery forms and techniques, exploring Indian Diamonds as both an ongoing aesthetic spanning 5,000 years and a highly significant form of cultural expression. Sevdermish, Menahem, Alan R. Miciak and Levinson (1998) studied in their paper the rise of the modern diamond cutting industry in India and its impact on the global diamond trade. They examined that the modern diamond industry in India grew at a remarkable rate, which is 82 fold by polished weight and 249 fold by polished value. Today India accounts for

about seventy per cent by weight and thirty five per cent by value of diamonds polished annually worldwide. India has had a profound effect on this trade because of the enormous quantities of small and low-cost diamonds manufactured there. Shukla, M. S. (2000) highlighted the profile of Diamonds in the Indian historical perspective. He told that pearls and precious stones were known as specialty of India at a very remote epoch. India was indeed the first and for a long time the only source of diamonds and pearls known to the European nations. Further, he dabbled in sources and geographical distribution of gems, physical and chemical properties their of and there working, occult and religious association and treatment of jewels for jewellery. In India there were eight regions or division of the country in which the diamond is said to occur. The areas supposed to produce diamonds are Klinga, Kosala, Himalaya, Matanga, Pundraka, Saurastra, Vairagara, and Sopara. Indian jewellery by the early historic period is remarkable for its sophisticated aesthetics and an elegant unified style. It represents master pieces of design and craftsmanship in gems and precious metals. He told that it is a bid, a venture to trace the career of gems from their matrix to jewellery forms and to retrieve them from dim recesses of time, distant interiors and dark corridors of centuries. The book also broached the nature and extent of their viability in relation to social environment, ethos and values of civilization entities. Purani, Keyoor (2000) developed Gujarat model of entrepreneurial innovation on the basis of innovative behaviour at the grass root level. He told in his study that Indian Diamonds industry is countrys second highest foreign exchange earner after textiles. He presented the SWOT analysis of the industry. Purani observed that diamond has lions share in Indian Diamonds exports. He stated that India is considered to be one of the worlds largest centers for cut and polished diamonds. Satya, Sundaram, I. (2001) analyzed the vast export potential of Indian Diamonds industry. He stated that in the exports of Diamonds products India has made credit-worthy progress over the years if we go by the volume of foreign exchange earned every year. However, India need to upgrade the quality of jewellery in keeping with the requirements of the European countries. In his study, Sunderam stated that exporters of Indian Diamonds products have started participating in the international fairs from where they now get the requisite feedback. The industry is looking at newer markets such as Europe and Australia to reduce the over dependence on the US market.

Ramamrutham, Usha B. K., Meera Sushil Kumar (2001) explained that the jewellery of India is a vital expression of the countrys aesthetic and cultural history. They presented factual information with many fascinating tales recorded in historical chronicles. The jewellery of India represents one of the greatest traditions of human craftsmanship in the world. It has been worn by women as adornment and by men as a proclamation of the power and as a symbol of rank and religious loyalty. Garga, Pawan Kumar (2002) studied the various aspects of export promotion activities besides highlighting the hidden potential of Indias major products and how India can increase its share in the world exports. The concepts of thrust products have been selected for detailed analysis, viz., handicrafts and jewellery, readymade garments and electronic goods etc. He told that Indias upcoming jewellery industry has two loosely defined sectors: the Exports Processing Zones (EPZs) comprising 100 per cent exportoriented units and the Domestic Tariff Area (DTA) which caters not only to domestic needs but to international markets as well. The product group of Diamonds makes significant contribution to Indias overall export earnings. Indian Diamonds products are exported to a large number of world markets. The USA, Hong Kong, Belgium and Japan are the major export destinations. Other important destinations for Indias Diamonds exports are Israel, the UAE, the UK, Singapore and Switzerland. Bhandari, Vandana (2004) found in his study that costumes, textiles and jewellery of India unravels the beautiful and sophisticated language of traditional Indian costumes. In this detailed study of the complex role played by clothing and ornamentation in Indian society. It focuses on the state of Rajasthan, one of Indias most celebrated and historically rich regions. She explored that how Indian costumes and jewellery reflects the wearers marital status, occupation, seasonal changes and religious commitment, serving as an essential symbol of their identity. Bhandari demonstrated in his study the cultural, social, historic and technical aspects of textiles, costumes and jewellery. Mukherjee, Arpita and Nitisha Patel (2005) stated that the Indian Diamonds sector offers huge potential for growth and exports and government provides various incentives for promoting exports. They reported that India is the largest consumer of the gold. Indian Diamonds sector is leading foreign exchange earner and employment provider. GJEPC (2005) in his annual report estimated the growth and market status of Indian Diamonds products. The report stated that in the present scenario, the USA remained the single largest importer accounting for 28.45 per cent of the total Diamonds followed by the

UAE, Hong Kong, Belgium, Singapore and Israel. The report pointed out that exports of cut and polished diamonds remained on top position in total Diamonds exports followed by gold jewellery, synthetic stones and coloured gems stones. Kala, Alok (2005) discussed the various segments of Diamonds sector of India and explained the vast area of industry. Productwise, Year-wise and port-wise data of Diamonds have been presented during the period 1995-96 to 2004-05. Latest tools and technology for Diamonds sector have been discussed and various types of information regarding Diamonds trade have been presented in this year book. It is an essential for traders of Diamonds products. Mathur, Asha Rani (2007) identified the fabled wealth of India. For centuries, her gold and gems brought to her land both merchants and invaders. She told about the tradition, ranges, varieties, best known techniques and manifestations and an overview of contemporary jewellery. Mathurs study is a glimpse of Indian jewellery in its totality. GJEPC (2007) covers the data of duration since 1997-98 till 2006-07 on various products of Diamonds with additional information on merchandise trade of India from Director General of Commercial Intelligence and Statistics (DGCI&S) and world export data from United Nations Statistics Division (UNSD). The book also highlights list of Harmonized System (HS) codes of chapter 71 pertaining to Diamonds along with the classification of HS codes specially pertaining to the GJEPC. Mukherjee, Ishita (2008) dealt with an emerging global industry the Diamonds industry, which is on the way to a huge information. This industry is extremely global in nature. She told that Diamonds industry can be classified into various sub-sectors such as gemstones, jewellery and pearls. Over the years, the global Diamonds markets have been impacted by various developments like falling trade barriers, increasing competition, changing customer preferences and developments in technology in various areas. As one of the most traditional industries, it has witnessed sweeping changes since the beginning of this millennium. Supply sources have become fragmented, resulting in shooting up of raw materials prices. Regulators are cautious and consumer activism is on the rise. These pressures have driven changes that are more intense and lasting than any witnessed in the previous fifty years. After exploring the position of Indian Diamonds industry, she observed that India has various advantages to emerge as a Diamonds hub. It has the largest and best artisan force for

designing and crafting the jewellery in the world. There is a considerable scope of value addition in terms of capacity building at the domestic front, quality management and professionalization. Realizing enormous potential of the industry, the Ministry of Commerce, Government of India declared Diamonds a thrust sector for export promotion. In this context, the first section of study explained the emerging trends and evolving dynamics of the global Diamonds industry as well as identified the future trends. The second traced the significance of India within global Diamonds industry, and covered the current scenario of the sector in India. GJEPC (2008) highlighted that the current global economic meltdown has hit the Indian Diamonds industry. Update on the diamond industry and reduction in the value addition norms for Diamonds industry has also been discussed. Export and import data of Diamonds products have also been displayed in this newsletter. Mital, Amita (2008) analyzed matters related to competition, demand and supply conditions of Indias Diamonds products. Government initiatives and regulation to promote exports of Diamonds products are also discussed. In his study, Mital pointed out that demand of Diamonds depends on various factors such as economic growth, employment levels, income levels, tax rates and credit availability and competition is based primarily on the quality, design, availability and pricing of products. She told that, foreign direct investment up to 100 per cent was permitted in the Diamonds industry under the industrial policy. Pan, Albert(2008) presented a full view of Chinese Diamonds market and suitable suggestions for sales jewellery products in China. Albert discussed and analysed China market competition, market size, sale channel, consumer characteristic, import and export process, market trend and potential forecast etc. The Author has provided reliable data analysis based on plenty of groups and figures to describe the current market situation and step by step introducing procedures. GJEPC (2009) discussed the major highlights of the Foreign Trade Policy (FTP) 2004-09 for Diamonds sector. It studied the contribution of various Diamonds products in Indias exports of last ten years. It also discussed the objectives, functions and facilities provided by Gem and Jewellery Export Promotion Council (GJEPC) to boost the trade of Diamonds products. Siegel, Dina (2009) highlighted the presence of Indian dealers, community and Indian market in Antwerp. In his study, Siegel stated that most of the families involved in the

diamond sector in Antwerp came from the region of Gujarat, a region with a longstanding tradition of migration all over the world. Kala, Alok (2009) discussed the product-wise export performance for the financial year 2008-09 of Indian Diamonds sector. He told that Indian Diamonds has witnessed decline due to the slowdown in the USA. However, the total Diamonds industry has shown a growth. The growth in the sector was primarily driven by gold jewellery which is registered an increase in the year under review. On the other hand, he found in his study that cut and polished diamonds and coloured gemstones have showed decreasing export trends. But the growing demand of gold has reflected strong consumer faith in gold. Simoni, Christian and Samuel Rabino (2010) examined current patterns of international marketing activities of Italian gold firms with a special emphasis on the USA market and juxtaposed them with those adopted by Indian gold firms. They evaluated small companies based in two regions (Arezzo and Hyderabad, India). They told that competitive behaviour of Italian Small and Medium Enterprises (SMEs) is primarily reactive, whereas Indian companies strategically focus on the expending Indian immigrant community. Kuriyan, Vinod (2010) reported that the Indian diamond Industry stands clearly above most of the competition. He told that the single easiest way to check on how the Indian diamond industry is doing today is to look at all the online diamond trading systems such as index online, etc. He also reported that the industry should push harder to ensure that its products get to more markets around the world if it wants to sustain value growth. Bijlani, Shanoo and Regan Luis (2010) reported that Diamonds industry has the potential to grow at an estimate of $ 45 billion to $100 billion by 2015. They stated that the jewellery industry featured two major sub-segments gold and diamonds with the former constituting 80 per cent of the jewellery market. Diamonds Products (GJPs) are expected to grow at compounded annual growth rate of 15 per cent. However, the Indian Diamonds market is unregulated and pricing is mostly based on the value of gold and labour charges. Most purchases in jewellery are investment oriented and so, they get commoditized. The integration of jewellery, luxury and fashion should be the next step for the ever-growing Diamonds sector.

3. PERSPECTIVE OF THE SELECTED INDUSTRY & EXPLANATION OF THE THEORETICAL OBJECTIVES 3.1 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.

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 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

Gem Diamond Industry

Industrial Diamond Industry

3.2 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 use nearly 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.

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.

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 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

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

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

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 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

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:

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

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 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!

3.3 THEORITICAL OBJECTIVES AND EXPLANATION

Much water has flowed under the bridge since the Indian diamond industry began its sojourn overseas many decades ago... to export polished diamonds! Today, India is a major player in the global diamond and jewellery business, aspiring to become the diamond trading centre of the world. The Indian industry has all along depended on expertise and finance for the growth. Currently many Indian banks are into financing diamond business, but State Bank of India is the country's largest lender. The bank has exposure of more than US$2 billion to diamond and jewellery companies in India, and US$600 million abroad. Its clients' NPAs are equal to about six percent of the total exposure. Antwerp Diamond Bank, Royal Bank of Scotland and Standard Chartered Bank are the three foreign banks, who together have substantial exposure as well. It is said that Antwerp Diamond Bank alone currently has $20 million of NPAs financed to four large Indian firms, out of its total credit to the Indian diamond trade of US$100 million. During the initial stages of the Indian diamond industry, diamond business was not an organised sector but business was strong. Lending banks bent backwards to lend the businessmen, as it was a lucrative investment idea. The cottage industry, though fragmented, was on strong fundamentals and the bankers were sure of getting their money back and more. Today, however, the industry has grown multi-fold and it is one of the largest foreign exchange earners in the country. In the past, India manufactured mainly small diamonds; and India was considered as only a manufacturing hub. But, the present scenario with 14 out of every 15 diamonds cut and polished here; and with 70% in terms of value and 85% volume, India is now undoubtedly the world's largest manufacturing centre. The Government of India has been supportive of the G&J sector in that it had declared the sector as the thrust area for generating Indias export demand. After the 2008 financial crisis in India, a number of major diamond manufacturers and export-oriented firms went bankrupt, leaving the banks with bad loans. The finance scenario underwent a complete change after the 2008 fiasco. Companies had to improve and handle risk management, currency fluctuations etc in a more professional way. On the other side, Banks too have had to integrate closer with the industry to deal with credit risk, re-insurance and so on. This led to lending banks becoming tight-fisted when dealing with especially small and medium sized manufacturing units. Besides, banks had to tackle the question of transparency, economic upheavals, business growth affected by prices, consumer demand etc of its clients, which made banks become a little cautious in lending

But diamond financing banks on the whole have fared quite well. Some banks were negatively affected too by a few bad apples, who have taken advantage of legislative loop holes resulting in diamond tripping or payment defaults and sometimes due to stretched receivables or their own deliberate delays. But majority of companies/clients of lending banks have performed well in accordance to the banks norms. Of course, though some of the late payers/defaulters to the bank had valid reasons, some bad accounts created uneasiness in banking circles. So, it is not surprising to see that steps are being taken by GJEPC and other industry organisations, to ensure that the relationship between lending banks and industry borrowers are comfortable and trustworthy. Considering the immense hard work and efforts that has brought India its global leadership position in diamonds and jewellery sector now, the Council would not like to see it go in vain. From the bankers view, lending banks in India are cautious and rightly so as they feel that they will have to be stricter, focus more on corporatisation and clients external and internal investment grade ratings. The jewellery sector being a little more complex than loose diamond manufacturing, the banks also feel the need to expand exposure in diamond jewellery sector but at the same time following prudent risk management norms. Recently, the Public sector banks (PSBs) in India decided against giving extra credit limits to gems and jewellery units. This step was taken as Export Credit Guarantee Corp of India Ltd (ECGC) had clamped restrictions on giving additional risk cover on this portfolio, as it has to work under certain norms. So, without adequate risk cover, public sector banks will face limitations to take additional exposure. Of late, the pace of bank lending to the G and J sector has slowed down to 19.2 per cent in February 2013 from 28.5 per cent a year ago. According to The Reserve Bank of India, the outstanding exposure was Rs 58,400 crore in February 2013. The ECGC is understood to be currently in the process of reviewing internal guidelines. Given the current scenario, foreign banks involved in diamond sector financing are set to gain a larger market share in India. Three foreign banks are in the fray now. Antwerp Diamond Bank, Royal Bank of Scotland and Standard Chartered Bank - have exposures of US $200 million, US $710 million and US $280 million, respectively in the Indian market. Therefore foreign banks which do not use the ECGC insurance but have different arrangements to cover risks will pick up business and prosper. It is estimated that, as of now, nearly 50 banks provide about US $4 billion (Rs 22,000 crore) to leading diamond and jewellery companies in India and abroad.

The diamond/jewellery industry, however, have their own challenges to conquer. More so the jewellery sector which faces non-availability of Gold pan India, though imports are now allowed. Another woe is high cost of finance, in comparison to what is prevalent globally. that ate into the profits. The jewellery manufacturers therefore feel that Banks should also take note of the fact that in the jewellery sector, where inventory turn was low, there is need for high working capital; besides capital for technological up gradation; and rising gold prices too. To add to the problems, the Basel III norm active from April 1, 2013 has increased the cost of borrowing as well. Jewellery manufacturers also feel that they should be assessed differently from cut & polished sector. According to them, besides delinking both these sectors, there should be different norms for both while extending banking finance. They also expect to be allowed inter-changeability between post-shipment export finance, packing credit and gold loan limit for jewellery units and also feel Banks should be flexible for routing of export documents. In a bid to build confidence between the diamond and banking sectors, which of late has been on a shaky ground, the GJEPC organised the Emerging trends in financing of Indian diamond and jewellery sector symposium recently. The aim was to bring the Indian industry face to face with the finance and banking sector and enable them to talk about bringing in the much needed transparency. Lately, the GJEPC has intensified measures for corporatization of small and middle sized units in the diamond cutting and polishing sector, to enable banks to get concrete information to assess the companies while sanctioning loans. However, the diamond industry on the whole is resilient and driven, but low margins; price and currency risks make it susceptible to failures and losses at times. The industry should focus on transparency and governance, which will bridge the gap between industry and the lending banks. The GJEPC has, in many cases, mediated and handled default cases, thus creating a sense of confidence in Banks to retrieve their monies. The recently organised GJEPC Banking Summit emphasized on giving a leg up to transparency in diamond and jewellery industry. So, the banks are heaving a sigh of relief? Clearly no...at least not yet. If Indian banks are being more cautious in providing financing to diamond companies, including sightholders of diamond producers De Beers and Rio Tinto, it is to prevent a further rise in their non-performing assets (NPA). Banks have planned to step up their monitoring of the asset quality of borrowers in the diamond industry before approving new loans. Banks are wary as the diamond stocks held as collateral are not fixed assets which can be disposed of at

any time. Besides, stocks also pose a holding risk that banks would keep in mind before lending. According to reports, Banks are now demanding collateral of 25-30 percent from sightholders of Rio Tinto and De Beers requesting loans. So, it goes without saying that the small firms are finding it difficult to qualify for finance as banks can even demand for 100 percent collateral, if they find it necessary. All said and done, it goes without a doubt that the future will see banks stressing more on authenticating companies' collateral in assessing loans applications ; quality of lending will be given due diligence; transparency & corporatisation in the industry will be called for and; credit rating agencys assessment will be taken as a reference. On the on sight, it looks like a difficult scenario to do business in the Indian gem and jewellery industry, but it goes without saying that a well organised business scenario with all the systems in place will augur well for the industry, eventually.

3.4 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.

4. ANALYSIS AND INTERPRETATION 4.1 INTRODUCTION

Analyzing any survey, web or traditional, consists of a number of interrelated processes that are intended to summarize, arrange, and transform data into information. If your survey objective was simply to collect data for your database or data warehouse, you do not have to do any analysis of the data. On the other hand, if your objective was to understand the characteristics of typical customers, then you must transform you raw results in to information that will enable you to paint a clear picture of your customers. Assuming you need to analyze the data collected from your survey, the process begins with a quick review of the results, followed by editing, analysis, and reporting. To ensure you have accurate data before investing significant time in analysis, it is important that you do not begin analyzing results until you have completed the review and editing process.

4.2 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

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 2011-2012(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.

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

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.

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

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.

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

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.

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

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.

TABLE - 6 Total Exports of Rough Diamonds by Major Countries

2008 CTS IN us $ In

2009 CTS IN

2010 CTS us $ In IN

2011 CTS us $ In IN us $ In

2012 CTS IN us $ In

2013 CTS IN us $ In

Milli Million Million Million Million Million Million Million ons Millions Millions Millions s Millions s s s s s s Chin a & HK israel India UAE 18.01 964.41 22.78 3450.45 40.08 546.44 42.22 2367.70 15.89 23.58 30.55 40.20 896.98

23.15 1821.16 14.05 763.41 12.57 972.11 15.60 1440.79

4135.21 17.92 4197.59 16.87 2328.53 24.45 3739.30 18.57 4418.94 601.05 37.60 829.59

22.43 713.18 32.99 967.81 37.07 1799.86

2825.25 35.58 3085.23 29.68 2088.25 46.60 3542.90 47.21 5871.78

Source: http://commerce.nic.in/eidb/Default.asp

CHART - 6 Total Exports of Rough Diamonds by Major Countries

6000 5000 4000 3000 2000 1000 0 China & HK israel India UAE 2009 20092 2010 2011 2012 2013

INTERPRETATION The above table and chart shows the export of Rough diamonds to different countries from the period 2008-2013. The value which shows highest is the country UAE while compared to other countries. There is a decrease in the between the year 2011-2012 and 2012-2013.

TABLE - 7 Export of Rough and Cut & Polished Diamonds (Value: US$ in Million) Year 2012-13 2011-12 2010-11 2009-10 Rough Diamonds 1,772 1,137 744 776 Cut and Polished Diamonds 23,356 28,221 18,224 14,804

2008-09 567 14,205 Source: http://commerce.nic.in/eidb/Default.asp

CHART 7 Export of Rough and Cut & Polished Diamonds (Value: US$ in Million)

35,000 30,000 25,000 20,000 Cut and Polished Diamonds 15,000 10,000 5,000 0 2012-13 2011-12 2010-11 2009-10 2008-09 Rough Diamonds

INTERPRETATION
Total polished + rough diamond exports for 2011-12 = USD 25 billion Estimated exports for 2012-13 = USD 17-18 billion (however this is in a depressed market) Taking annual exports to be about USD 18 20 billion in the base case o Average profit in 2012-13 for the sample of 71 companies was 2.3% o Estimated profit on entire exports @ 2.3% = 2,230 2,485 crores

TABLE - 8 Growth Rates of the Exports of Gems and Jewellery Products during the Period 2008 - 2009 to 2012-13 (Values in Rs. Crores) Sr. No. 1 2 3 4 5 6 7 8 9 10 Cut & Polished diamonds Gold Jewellery Coloured Gemstones Pearls Non-Gold Jewellery Synthetic Stones Costume/Fashion jewellery Sales to Foreign Tourists Rough Diamonds Total 14.39 25.90 9.55 1.63 26.92 3.80 13.20 15.18 27.03 16.59 22.68* 37.51* 12.73* 1.74** 21.36* 1.23 5.64* 13.49* 11.56* 30.74* 0.966 0.987 0.900 0.144 0.962 0.082 0.639 0.910 0.911 0.981 514.80 1407.57 162.13 3.04 456.56 1.53 31.92 182.16 133.77 945.01 Product Groups CAGR t-value
R2

F-value

Source: Ibid., Table - 3.1 Note: * The coefficients are significant at = 0.01. ** The coefficients are significant at = 0.10.

CHART - 8 Growth Rates of the Exports of Gems and Jewellery Products during the Period 2008 - 2009 to 2012-13 (Values in Rs. Crores)

F-value
1600 1400 1200 1000 800 600 400 200 0

F-value

INTERPRETATION The above table and chart shows the export of GEMS and JEWEELERY for the period of 5 years from 2008-2013. The value which shows highest export is gold after that the cut and polished diamonds are in the second place.

TABLE 9

Indices of Value of Gems and Jewellery Exports (port-wise) during the Period 2008-2009 to 2010-11
Year Mumbai New Delhi Jaipur Chennai Cochin Coimbatore Bangalore Kolkata Surat Hyderabad Tota l

200809 200910 201011 201112 201213 C.V.

109.5198 98.39643 124.7768 87.97875 104.1603 12.18452

70.6003 97.73218 96.97047 333.4136 132.3639 45.07672

128.50196 118.81934 119.82071 99.02149 106.40620 13.98749

137.4836 2 119.2488 2 186.0835 3 123.9965 6 133.0522 5 31.51659

100.688 86 77.0809 5 360.798 81 140.385 40 158.557 24 49.2131 0

45.76271 42.96296 156.8966 65.93407 146.6667 47.7148

112.0355 140.9655 74.78995 33.84695 137.2307 102.8964

169.3383 5 189.6351 4 155.8485 69 139.8811 5 111.0934 2 56.59452

121.91 455 79.919 92 167.98 049 139.66 955 130.22 034 73.331 58

168.92596 77.96296 232.69992 92.44641 455.87044 73.72713

109.18936 102.45809 121.80922 94.01641 109.23020 11.44361

Source: Ibid.,

CHART 9

Indices of Value of Gems and Jewellery Exports (port-wise) during the Period 2008-2009 to 2010-11
400 350 300 250 Mumbai 200 150 100 50 0 2008-09 2009-10 2010-11 2011-12 2012-13 New Delhi Jaipur

INTERPRETATION Indices of the value of exports of gems and jewellery products from ports for the study period and it has been observed that the lowest coefficient of variations of Mumbai and highest coefficient of variations of Bangalore (ranges from 12.18452 to 102.8964). This type of analysis of the exports indices is very useful in formulating the appropriate policies about various exports clusters of India.

Table 10 Exports of Gems and Jewellery from SEEPZ-SEZ, Mumbai during the Period 2008-2009 TO 2012-2013 (Values in Rs. Crores) Percentage Change 8.134597 10.7057 10.31132 8.100821 5.316054

YEAR

Total Exports of Gems and Jewellery 73583.24 77430.24 84181.96 95610.31 139056.35 16.59 (30.74*) 5659.22 (11.10*)

Exports of Gems and Jewellery From SEEPZ, Mumbai 5985.7 8289.45 8680.27 7745.22 7392.31 22.75 (16.49*) 471.18 (13.28*)

2008-09 2009-10 2010-11 2011-12 2012-13 CAGR Trends values

Source: Gem and Jewellery Export Promotion Council (GJEPC), Ministry of Commerce and Industry, Government of India, New Delhi. Note: * The coefficients are significant at = 0.01. Figures in parentheses are t-values.

CHART 10 Exports of Gems and Jewellery from SEEPZ-SEZ, Mumbai during the Period 2008-2009 TO 2012-2013

160000 140000 120000 100000 80000 60000 40000 20000 8289.45 0 2009-10 2010-11 8680.27 7745.22 2011-12 7392.31 2012-13 77430.24 84181.96 95610.31 73583.24 5985.7 139056.35

INTERPRETATION The above table and chart shows the export of GEMS and JEWEELERY for the period of 5 years from 2008-2013. The Mumbai port is used as the biggest means of communication so thats why Mumbai port is shown the best export value.

CHAPTER V

FINDINGS, SUGGESTIONS
5.1 INTRODUCTION
The results section of a research paper describes to the reader the outcome and findings of the research project. Using some simple techniques in the preparation of this section produces a clear and comprehensible presentation of your research. Step 1 Organize the layout of the results section in the same way you structured the hypotheses or research questions in the introduction section of your research project. This will make it easier for the readers to follow your results. Step 2 Start by describing the statistical test or tests used to compare the different conditions or test your hypotheses. Be clear on what hypothesis or question is being compared with each statistical test as well as how you are defining the groups being compared within the test. Step 3 Use descriptive statistics to describe the overall characteristics of the groups being compared or sample tested with the inferential statistic. Step 4 State the statistical results in the acceptable format for your discipline. The American Psychological Association (APA) is a very common format for research results; you should familiarize yourself with whichever format is appropriate and follow the guidelines rigorously. Step 5 End each statistical test with a sentence or two indicating what that particular statistical result says about the hypothesis or question. Was your hypothesis supported by the statistical result? Step 6 Use tables and figures sparingly. Tables and figures should help the reader visualize the important results, but not carry the bulk of the work in the presentation of your findings. Tables and figures are helpful to summarize a large amount of data that is essential for the reader to see but for which it would be too difficult to include each number in the narrative format of the results section. Step 7 Rewrite and revise until you have every test necessary to test your hypotheses and the reader can easily determine what the results indicate in terms of your hypotheses or questions.

5.2 FINDINGS 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 2011-2012(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 20112012.

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 2011-2012 it shows the decreasing growth rate (i.e.) 25.57.

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.

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.

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.

The above table and chart shows the export of Rough diamonds to different countries from the period 2008-2013. The value which shows highest is the country UAE while compared to other countries. There is a decrease in the between the year 2011-2012 and 2012-2013.

Total polished + rough diamond exports for 2011-12 = USD 25 billion Estimated exports for 2012-13 = USD 17-18 billion (however this is in a depressed market) Taking annual exports to be about USD 18 20 billion in the base case Average profit in 2012-13 for the sample of 71 companies was 2.3% o Estimated profit on entire exports @ 2.3% = 2,230 2,485 crores

The above table and chart shows the export of GEMS and JEWEELERY for the period of 5 years from 2008-2013. The value which shows highest export is gold after that the cut and polished diamonds are in the second place.

Indices of the value of exports of gems and jewellery products from ports for the study period and it has been observed that the lowest coefficient of variations of Mumbai and highest coefficient of variations of Bangalore (ranges from 12.18452 to 102.8964). This type of analysis of the exports indices is very useful in formulating the appropriate policies about various exports clusters of India.

The above table and chart shows the export of GEMS and JEWEELERY for the period of 5 years from 2008-2013. The Mumbai port is used as the biggest means of communication so thats why Mumbai port is shown the best export value.

5.3 SUGGESTIONS 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.

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.

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

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