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The giant Indian cutting industry will play a key role in the recovery of the diamond sector from the extended global lockdown that had been instituted as a result of the COVID-19 coronavirus. But with the pipeline already clogged with excess rough supply before the start of the crisis, calls are growing for a temporary moratorium on rough diamond purchases, even after cutting plants resume activities, so as restore a sense of balance in the market.

Th suggestion that the Indian industry take advantage of the current situation appears largely to have been raised by Chaim Even Zohar, a respected industry commentator. 

Even Zohar’s remarks came in response to comments made by Stuart Brown, an ex-joint Managing Director of De Beers and current the CEO of Canadian miner Mountain Province Diamonds, who told the Financial Times article: “We need India to open up. Until the manufacturing opens up there, there will be no demand for rough diamonds.”

The rough diamond mining sector may be in need of the Indian industry right now, but is a resumption of rough diamond in its best interests, Even Zohar asked. 

India is already sitting on $1.5 billion to $2 billion of rough diamond inventory, with another $5 billion in polished ready for sale. 

“To regain trust and confidence from their banks, India needs to sell for a couple of months only from inventory,” wrote. “This will reduce their banking debts, bankers may warm up to the novel idea that the industry is bankable, and the overall health of the industry will certainly improve dramatically. Business becomes more manageable when one can calibrate current rough purchases with expected polished demand.”


Even Zohar’s call seemed to fall on willing ears. Within days, the Indian Gem and Jewellery Export Promotion Council (GJEPC) delivered a proposal that rough diamond imports be curtailed until June 15. On India imports about $1 billion of rough diamond each month.

For the mining companies this is a significant development. India largely monopolizes both the  cutting and polishing diamonds, processing 14 out of 15 stones produced. 

“Such a curtailment of imports will help the industry face the challenges arising out of the drop in demand in the global gems and jewellery market,”  GJEPC declared in a statement. However, the decision to institute a moratorium should be left up the to individual importer.”

 “This one move will send a signal to the banking system that the diamond industry will not increase its indebtedness at a time when our downstream colleagues continue to meet consumer demand. This will reassure bankers and will prompt them not to reduce credit exposure to the industry.”

Industry commentator Chain Even-Zohar, whose comments sparked the discussion on whether a moratorium on rough diamond imports would be advantageous.

The country’s leading diamond trade organization is calling for an initial voluntary rough purchasing moratorium until the middle of June.


In actual fact, Indian industry’s total indebtedness to banks is not excessively high. According to the GJEPC, it currently stands at around $9.5 billion. 

“The industry has honoured a major portion of its debts to the banks [during the lockdown crisis], and if the diamond sector tides over the next three months, the situation should be under control. It is expected that demand will be restored by 2021,” the GJEPC statement noted.

But there should be additional benefits, the statement continued. According to the GJEPC, the moratorium on imports is “ will allow fewer rough diamonds to enter the pipeline and the producer companies will face lesser strain and indirectly share in the financing burden, thus contributing to a faster restoration of normalcy in an otherwise healthy business.”

GJEPC said it will review the situation along with all other trade bodies in the second week of June to suggest a further course of action

“This industry has come out of every crisis, though this time it may take longer to find the new normal, which could be about 20 percent below the pre-corona level in value terms,” stated  Colin Shah, vice chairman of the GJEPC.