Is Indias Diamond Biz Losing Its Luster?
India is perhaps best known for its dynamic outsourcing sector, well-regarded software development, and emerging conglomerates such as Tata, Reliance, and Birla. Yet India has also long been the world’s biggest center for processing uncut diamonds imported from African mines, primarily in South Africa, Botswana, Congo, and Angola. It’s a $12 billion industry, and diamond polishing and processing factories in Gujarat and Maharashtra are big employers. India’s diamond industry employs about 3 million in all. And Indian Prime Minister Manmohan Singh’s government hopes to keep it that way. In early May, India’s Finance Minister Palaniappan Chidambaram announced that polished diamond imports would be duty-free, a relief from the previous 3% levies. It was an important victory for Indian diamond merchants, who face a multitude of challenges these days in this ultra-competitive market. Local players have long argued that the tax relief is justified if the domestic industry, already a leader i
