While most of the world’s diamond processing industry is scrabbling furiously, trying to get assured rough supplies sewn up, India’s Gem & Jewellery Export Promotion Council (GJEPC) chairman Sanjay Kothari, interestingly enough, doesn’t think rough sourcing is the most vital consideration. “You can sell diamonds no matter what price you bought the rough at if you have strong demand in the polished market. The problem is, demand for polished is sagging, especially in key markets like the US. Given this situation, we won’t be able to improve profitability no matter how inexpensively we buy rough. The vital consideration is generating demand in consuming markets.”

Reviewing the year with regard to the Indian export production industry and looking ahead to the future, Kothari said he doesn’t think the US market will revive enough to help the Indian industry for the next two years. The key to surviving and thriving, he says, is to start opening up new markets. This, he says, will take time – initiatives in new markets will have to run two or three years before we see any results.

This is easier said than done, he admits, as the diamond and diamond-jewellery production industry is not inclined to invest time and more money without seeing returns for the next few years. But it is the only way forward, he asserts.

There worrying signs that Kothari’s assessment of the situation in the US is accurate. Already, Merrill Lynch has said that the cost of celebrating Thanksgiving in the US is up 7.9% from last year. This could result in weak spending performance in the first quarter of 2008 and the first actual consumer contraction in 16 years!

There are only a handful of people like Kothari in the diamond industry worldwide and getting the majority to listen to what they say will take some doing. But the worldwide diamond and diamond-jewellery production industry could be heading for trouble.