RAPAPORT… By all accounts, Indian companies are among the strongest buyers in today’s U.S. wholesale diamond and jewelry market. Sushil Goyal, president of the Indian Diamond & Colorstone Association (IDCA) and owner of jewelry manufacturer Liberty Gems, says that India-based firms are definitely turning to the U.S. when they need to procure goods, especially larger diamonds. “At the Las Vegas show, there were many who were buying,” recalls Parag Sanghvi, president of polished diamond seller Sejal Diam.
Contrary to popular perception, “It’s not just melee anymore,” remarks Basant Johari, the New York Diamond Dealers Club’s (DDC) newly elected vice president and chairman of its board of arbitrators, as well as the president of Kuber Manufacturing. Manish Gandhi, a director of the IDCA and vice president of diamond importer and manufacturer Shinestones, specifies, “Indians are buying closeouts and certified goods of 5 carats and up.”
Cash to Spend
Goyal believes India’s growing economy is recovering from the global recession faster than most, giving Indian dealers the means to buy. “When the economy slowed, India was one of the few countries where the effect was not as significant. It was also one of the first countries to come out of it,” he explains. Similarly, Johari notes, “Far East economies are doing quite well and consumption has gone up in the home countries.” Jit Jariwala, a manager at Jewel Goldi, a subsidiary of Shree Ramkrishna Export (SRE) that specializes in diamonds and diamond jewelry, explains, “The Indian market is booming. People have more money and there is lots of new infrastructure and new industry, while in Europe, business is going down. Here in the U.S., it is a buyer’s market. In India, it is a seller’s market.”
The Indian tradition of paying in cash helps, as well. “That is just true of the way business is done in the Far East, including real estate or anything,” Johari notes. Goyal recognizes, “Obviously, there is a price advantage when you do that. Companies can pass these benefits on to their customers. Lower overhead can also be passed on to customers. This can play a major role when economies are down.”
Fewer Middlemen
Indian companies have taken steps to streamline the supply chain, which cuts costs, too. “I personally feel that the middlemen are out of the market. Indians are working directly with the retailers,” Gandhi says.
Johari points out that many firms have grown beyond supplying just the major retailers. “More and more are selling to the independents… for further growth, you’ve got to,” he reasons.
While Indian jewelry is often thought of in terms of mass-market goods, Indian firms actually offer a diverse range of qualities.
“I think we are following what the market demands,” Johariclarifies. “We use the same techniques that are used around the world and we adjust our products according to the market.” Gandhi states that Indian jewelry today “is definitely better. It depends on the price point.” As evidence of the high quality, Goyal points out that “a lot of Italian companies are in manufacturing partnerships with Indian companies.”
Certainly, a significant segment of the U.S. market is seeking lower-priced goods and Indians are ready to provide them. “We brought in smaller, more affordable diamonds to the common man,” Johari stresses. “We are giving consumers the price they can afford. We are changing according to their demand. It is not us who tell the consumers what to buy.”
Melee Prices Up
In this aspect, Indian manufacturers may be victims of their own success. “In the past six months, it has been hard to get the small diamonds in the same quality at a good price,” Jariwala concedes. “People are using more and more small diamonds and production is not keeping up with it,” Johari agrees. He concedes that competing demand from China and India is also a factor. “Maybe this demand will make the supply increase,” Sanghvi notes.
The good news is that many Indian jewelers and diamantaires are intent on securing a vital role in the U.S. market because they are confident in our country’s future. “The people who I talk to, they feel that the worst may be behind us,” Goyal states. “Those who need credit will all go,” concludes Gandhi. “If you stay in long enough, you will grow.”
