With some of the diamond trading hubs and mining countries building up capacities to process rough diamonds, India is under the threat of losing out its monopoly in the processing business. Indians are known for their diamond processing skills and in many of these countries Indians are training the native manpower. For decades India has been maintaining its monopoly in cutting and polishing small diamonds. The country also grabbed a good portion of the large diamond processing business from other nations like Israel and the US after the 2008 global meltdown. The government policy and the finance scenario were favourable for the industry then. Currently, India has around 40 per cent share in the processing of large diamonds and 92 per cent in small carat diamonds in value terms.

“Many countries like Dubai, Russia, Botswana and Namibia are developing their own diamond processing capacity. In many of the countries, Indians provide training to the native population. On the other hand, the scenario in India is getting difficult. GST on an industry that is 100 per cent export-oriented, lack of adequate finance and delay in tax refunds are hurting the industry,” said Praveen Shankar Pandya, chairman, Gem and Jewellery Export Promotion Council.
“We do not produce rough diamonds and are entirely dependent on imported goods. If the policies are not conducive, we will see the industry losing its business to other countries. Though exports grew last year, we have seen exports shrinking the previous two years and this year also we would see a contraction,” Pandya added.

Recently, Nemesis International, a Dubai-based diamond trading company, opened a diamond polishing factory, Almas Diamond Services DMCC, the first such facility to be set up in the UAE. It is being viewed by the diamond trade as a precedent of sorts in the region.

With Dubai having become the world’s third largest diamond trading centre valued at over $14 billion in 2016, the facility will help in elevating the position of the UAE in the global diamond business.

“Given the growing volume of Dubai’s diamond trading industry and its contribution to the country’s GDP, economic growth and stability, the facility which will contribute to Dubai’s standing as a leading global diamond centre on par with New York, Antwerp and Mumbai,” a release quoted Konema Mwenenge, CEO, Nemesis International.

The Russian government has been developing diamond processing capacities in its Far Eastern region. The government is providing lot of attractive initiatives for investors to set up diamond manufacturing units in this region. “Facilities offered by the government and local authorities have resulted in ease of doing business for foreign investors promoting competitive manufacturing that is commercially viable,” Jaipur-based precious stone manufacturer KGK Group had said recently while announcing its plan to set up a diamond processing unit in the region. The facility at Vladivostok will have a capacity to process 150,000 carats per year and will employ 400 workers.