The Gem and Jewellery Export Promotion Council (GJEPC) convened a gathering in Mumbai, bringing together top bankers involved in the diamond industry. This interactive session, held in BKC, Mumbai on 28th October, aimed to create an open dialogue between diamond industry stakeholders and lending institutions. The primary objective was to assess the current challenges facing the sector and understand their potential implications for bank credit.
The meeting drew the participation of key figures from GJEPC, including Chairman Vipul Shah, Vice Chairman Kirit Bhansali, Banking Insurance & Taxation Sub-committee Convener Saunak Parikh, and Executive Director Sabyasachi Ray. Also in attendance were Anoop Mehta, President of the Bharat Diamond Bourse (BDB), and Biju Pattanayak, Executive Vice President and Head of the Global Diamond & Jewellery Group at IndusInd Bank, a luminary in the banking sector.
During his address, Vipul Shah, Chairman of GJEPC, expressed his optimism, saying, “It is my hope that this meeting will serve as a platform for productive conversations, fruitful collaborations, and the building of enduring partnerships between the diamond and banking sectors. By working together, we can unlock the true potential of these industries and chart a course toward a more prosperous and sustainable future.”
The speakers emphasised the importance of “de-inventorising” the diamond chain as a critical step in revitalising profitability, building trust, and restoring confidence in the diamond market. They said an encouraging sign is the increasing shift in jewellery consumption from gold to diamonds within India, indicating positive developments in the domestic market. Moreover, emerging markets like India are poised to account for a significant portion of global diamond consumption, potentially ranging from 20-30%. A resurgent Japan economy also presents a positive outlook for the industry.
China’s underperformance in terms of diamond jewellery consumption remains a concern. Banks were also under pressure due to the reduced return on capital. However, one positive sign is that outstandings for the diamond industry are down by about 30% since March this year. Yet, this also poses challenges for banks because, under the new Basel Regulation, they must bear the capital cost on the limits sanctioned.