Shri. Deepak Bagai

As we get together today to start our deliberations in IGS-5, I cannot help but reflect on some of the events during the last 4 years i.e. since 1999, when the Forum held its first seminar at Hyderabad. Attack on the world Trade Centre in New York on 11th. September 2001 followed by war in Afghanistan, and then another one in Iraq had profound effects pm business hard was the breakout of SARS in a number of countries. These were moments of panic, fear and anxiety. But we could absorb all that and managed to march on. In the industry itself, there have been highs and lows in business, there have been new discoveries, new technologies, new synthetics and new treatments.

Let us take a quick look at the important happenings inside the industry and their impact.

As before, the king of gems, Diamond continued to hold sway in terms of shear volume of business. This has been true for the U.S., Europe as well as for India.

There were substantial changes in the style pf business being conducted by the Diamond Trading Co. and the DeBeers Group itself. The system of releasing the diamond rough underwent a change as "Supplier of Choice" sales and marketing strategy was brought in. This is aimed at stimulating sustainable and long term growth in consumer demand for diamond jewellery worldwide. As a result, we now see a new list of 34 DTC Sight Holders from India. Some of the old names do not figure in the list and a number of new entrants have appeared. New initiatives have been taken to market diamond jewellery by providing substantial promotional support and encourag-ing creativity in jewellery. The DTC is investing about 118 billion dollars annually in advertising, publicity and brand promotion.

On the other hand, substantial strides were also made by the Rio Tinto Group. They launched their first ever Business Excellence Model in India in August this year. Developed specially for Duiamond and Jewellery Industry, this model is structured 4 key areas : -

Quality, Environment, Health and safety, Social responsibility

By adopting this strategy, the Rio Tinto Diamods is also asserting its long term commitment in India.

This itself demonstrates the importance attached to our country as a center for diamond manufacturing, business and marketing. Clearly, the two major players - the DeBeers, and the Rio Tinto are competing in the Indian diamond market. This augurs well for the Indian diamond and jewellery Industry.

During the last few years the entire diamond industry has been abuzz with diamonds coming out from disputed territories of countries like Angola, Ghana and Sierra Leone in Africa. Most of such diamonds had been used by rebel groups to purchase arms for fighting bloody wars. Hence the name 'Conflicts Diamonds'. With the WFDB announcing the Kimberley Process Certification Scheme to keep such diamonds out of the trade, India stepped forward to become a signatory in the first phase. This has shown our resolve to ensure a transparent trade of clean diamonds. For conducting international business, it has now become compulsory to follow procedures as required under the Scheme. The basic requirement is that a recognized agency in the producing country has to certify while releasing rough diamonds attesting the legitimacy of the production. Such measures are likely to continue in near future and this will also help curb illegal trade in diamonds to a large extent.

Meanwhile the search for new viable deposits of diamonds goes on with much enthusiasm-DeBeers is undertaking more prospecting in different countries, including India. They have already acquired sizeable areas for prospecting and mining in States like Orissa, Chhatisgarh, Madhya Pradesh and Jharkhand. The areas covers several thousands of square kms. Rio Tinto has also acquired around 14000 sq. kms. of diamond mining leases in Chhatisgarh and Madhya Pradesh.

In Canada, now it is the turn of Diavik to be in production line after Ekati. Rio Tinto has 60% interest in Diavik and the production has already started since July this year. Production has also been stepped up at Argyle. With such new sources opening up there should not be apprehensions about the supply of rough diamond in the market.

Turing to the coloured stones, the market has been doing reasonably well. Exports from India have gone up. The availability of rough in respect of Tanzanite, Emerald, Ametrine and a few others have been erratic in between. In spite of serious competition from Thailand, the gem cutting industry has been maintaining its level of performance. China has also emerged as a force to reckon with. New technologies and new equipments have helped improve quality of cutting greatly. The requirements of the export market as well as the trends in the domestic market have brought about a significant change in the outlook of our cutting units.

With new facilities and incentives being offered by the Government of India, the number of special economic zones and export promotions zones has considerable gone up. This has given a boost to jewellery manufacturing. Jewellery is now a favoured item for export as well as for the domestic market with a great scope to improve sales.

An important international event to come our way was the ICA Congress-2003 which was hosted by Jaipur from 5th. to 9th. January. It was attended by a large number of dignitaries from all over the world. On this occasion, the Keynote Address with the Theme "Future of Coloured Gemstones" was delivered by William Boyajain, President of the GIA. He made many recommendations to boost the global coloured sector. Among the recommendations outlined by him, were the needs to promote appreciation and sale of the coloured gemstones, address the research and technical issues, work closely with the laboratories and perpetuate ethical standards in the trade. Among other ideas thrown up from these deliberations was the advice to coloured gemstone dealers to be totally transparent about treatment and disclosure. They were also advised to adopt definite marketing strategies and also go in for branding. To express their support to the coloured stone trade, GIA has dedicated 2003 as the year of colored gemstones.

Clearly, a better standard in ethics has assumed a great significance in the industry. We had hardly come to grips with the synthetic diamonds going into the market, when the HPHT treated diamonds with enhanced clarity and clear grades appeared on the horizon. Just when we thought we had been able to tackle the difficulties related to conventional treatments on coloured stones, the Be-diffused orangy pink sapphires looking like highly priced "Padpardscha" sapphires of Sri Lanka were placed in the market emanating from Chanthaburi in Thailand. There are many in the market who have been squarely cheated by such treated diamonds and sapphires.

Let us accept the fact that the tradespeople in gem and jewellery sector face a number of temptations every day. Business is not getting any easier and the competition is fierce. It could be tempting to look for short cuts and make quick profits at the expense of the customers. Right from the stage of mining to the stage of making and marketing stone-studded and plain jewellery, carvings, beads, and objects, what goes on in the back of our minds? The answer is simple. We want to take the bounties of nature in the form of gems and precious metals and make them into beautiful works of art so that people can enjoy possession and using them. Therefore, we must consider the fact that our clients and consumers are desperately looking for someone to give them good value for the money they are ready to spend. The question bothering most people is from who they should make a purchase? We can only advise them to look for someone who has credentials and enjoys a sound reputation. Therefore, they should choose a jeweler who is constantly reviewing his or her actions and considers the quality of the product, offered, the correctness of information being given to the client as important factors in his or her business. It should be obvious to all of us that the tradespeople who misuse their position of trust with the consumer may gain in the short run but they will surely lose in the long race. Temptations are unavoidable but our response to these temptations reflects our character to our customers. That is how reputations are built or destroyed.

Going further, let us consider the process of change which affects us all. A fundamental law of nature dictates that those who adapt themselves continually to the changing situations, shall survive and other will fade away.

This applies in full measure to the gem and jewellery business. The traditional jewelers now feel threatened with new and unknown synthetics, as well as by treatments on natural gems. They are also hurt by fabricated diamond price lists and fictitious certificates. In our industry, we must learn to deal with such types of changes. Since change is inevitable, need to adapt is imperative. Those who believe in maintaining only the status-quo, will find themselves falling behind. The bottom line is that you should not hesitate to take calculated risks. As a matter of fact, as one eminent personality put it, "the biggest risk you can take is not to take one at all." There have to be attempts to improve, to improvise and to compete. For doing all this and more, gemological societies and associations must play a more significant role in the scheme of things. Accordingly, I anticipate a wider and more pro-active role for the Forum of Indian Gemmologists in the coming years.

Finally, having said all this, it makes us ponder over the importance of gemological education and research. There is hardly anyone today, connecte4d to this industry as a business person or otherwise, who will not speak out for educating people already active in business and their younger generations, and all those interested in gems and jewellery in different capacities and looking forward to making a career in this line. Quality training is the need of the hour. No wonder, a number of institutions have come up in the country in an effort to fulfill this need. Similarly, gem testing laboratories are now much in demand. Therefore, the industry itself must come forward to generously support gemological education, research and strengthening of gem testing facilities. This is a relationship which clearly benefits both. The labs have to equip themselves with better and latest equipments to be able to detect synthetics and treatments on one hand and for accurate grading of diamonds on the other.

In the backdrop of this, I take this opportunity to call upon you to consider including these issues in our discussions in this seminar and make suggestions for achieving what we all aspire for.

We are fortunate to be meeting in Orissa, the land with a rich variety of gem deposits, including diamonds. May the land of 'SURYA' fill us with energy and enthusiasm ! I wish you all very invigorating and stimulating sessions.

Thank you.