(IDEX Online) - Indian diamond producers are being urged to adopt a voluntary month-long ban on the import of rough diamonds from 15 May.Trade bodies make the plea in an open letter and say it will help the industry survive the coronavirus crisis and send a clear message to banks that it is not prepared to face further debt.An estimated $7bn of rough and polished diamonds have been stuck in India, the world's production capital, since the country went into lockdown on 25 March.Five trade bodies representing India's diamond industry have jointly written a letter urging their members to cease importation for at least a month. Copies have also been sent to the Indian government calling for "urgent measures".The letter is signed by heads of India's Gem & Jewellery Export Promotion Council (GJEPC), Bharat Diamond Bourse, Mumbai Diamond Merchants' Association, Surat Diamond Bourse and Surat Diamond Association."Import stoppage will help the industry face the challenge that has arisen out of turmoil in the global gems and jewellery market," says their letter."This move will basically cause fewer roughs to enter the diamond pipeline and the producer companies will thus face lesser strain and indirectly share in the financing burden and contribute to a faster restoration of normalcy in an otherwise healthy business."Full text of the letter below:
Dear All,
Sub: Appeal to voluntarily cease import of Rough Diamonds for one month from May 15, 2020
As you are aware, the Covid-19 pandemic situation is having an unprecedented impact on the global economy. Various countries across the world have declared lockdowns, and, by and large these countries have temporarily closed their economies. In order to fight this pandemic situation, India has initially declared a lockdown for 21 days, which has been extended for another 19 days. Various countries and different departments/ authorities of the Government of India have recognized and declared Covid-19 pandemic as a 'Force Majeure' event.
With these lockdowns, and various administrative actions including travel bans, etc. imports and exports of various products have been tremendously impacted. The Covid-19 pandemic is also having a huge impact on our industry, and, there has been a serious strain on the companies throughout the diamond value chain.
In the process of monitoring the situation & on responding to the plea from the members the GJEPC, we had several meetings of the top member exporters and local members of Committee of Administration of the GJEPC to discuss the current market scenario and possible steps that can be taken by the Members in consequence of the unprecedented issues arising from the Covid-19 pandemic, for strengthening the diamond industry.
Subsequently Vice Chairman and Convener (DPC) on behalf of GJEPC and BDB, SDB, SDA & MDMA have done consultationmeetings with prominent members of trade in India and the world.
Based on the opinion received from such consultation and the decision taken after that in the Diamond Panel Committee of GJEPC and the four diamond associations, GJEPC has written a note to the Hon'ble Commerce Minister, Commerce Secretary, Economic Advisor and other Government officials and apprised them of the precarious state of the Indian gems and Jewellery industry currently due to this COVID 19 crisis which has called for urgent measures so that the industry may survive during this critical period.
In order to protect the interest of the industry at large during this current crisis, the need for urgent measures to be taken was discussed in the meeting and it was suggested that the individual members may consider the option of curtailing their import of rough Diamonds from 15th May2020 at least for the next 30 days.
It was assessed that such import stoppage will help the industry face the challenge that has arisen out of turmoil in the global gems and jewellery market.
On one hand this move will send a signal to the banking system that the diamond industry will not increase its indebtedness at the time when our downstream colleagues continue to meet consumer demand so that the bankers feel reassured & do not reduce the credit exposure to the industry.
On the other hand this move will basically cause fewer roughs to enter the diamond pipeline and the producer companies will thus face lesser strain and indirectly share in the financing burden and contribute to a faster restoration of normalcy in an otherwise healthy business.
Based on these inputs and consideration, the Chairman of the GJEPC, President of BDB, Chairman of SDB, President of SDA and President of MDMA urges its members as well as non-members to consider their commercial and contractual position individually, and, consider ceasing their imports of rough diamonds voluntarily for a month of 1 months from May 15,2020.
It may be noted that this is merely a suggestion by GJEPC and the four prominent diamond trade bodies of India to their members and non-members in the industry, issued in the overall interest of the industry and the related stakeholders. The members and non-members may take their respective decisions independently and voluntarily.
Also, it has been decided in the meeting to take review of the situation by all the trade bodies in the 2nd week of June to suggest further course of action in this regard.
In view of the above, all concerned are requested to consider this appeal in the larger interest of the industry and voluntarily cease to import the rough diamonds.
Thanking you,
Yours Sincerely,