Diamond Industry Hurt by International Diamond Manufacturers' Association President's Remark

International Diamond Manufacturers' Association (IDMA) president Maxim Shkadov's observation in a letter to diamond manufacturing community worldwide that in India bankers have allowed clients from the diamond industry to use funds provided to purchase rough diamonds to serve the destructive interest of speculation on rough prices, has upset many.

IDMA president in his February 17 letter took up the issue of industry financing involving the rough diamond producers, bankers and diamond manufacturers.

Shkadov pointed out that to run a healthy diamond manufacturing business, the industry needs a finance system that fulfills its true purpose. The banks provide funds that are allocated to finance the purchase of rough goods and the operation of the factories. This includes, of course, the employment of cutters and polishers and the consequent fulfillment of all social responsibilities towards our employees.

But the reality of recent years has proven that some of the banks, which play an integral and important role in keeping the industry healthy and profitable, have not kept their finger on the pulse, he has said.

Pointing towards the Indian diamond manufacturers, Shkadov wrote, "It seems that some of our own members have forgotten that bank financing is provided to purchase rough and to produce polished diamonds, and not to be used to finance non-related projects, thereby arm wrestling the rough. Banks provide easy credit to clients, who consequently allocate it to carry out financial trickery, resulting in some to pay crazy prices for rough."

In his reaction to Shkadov's statement, Vipul Shah, chairman, Gems and Jewellery Export Promotion Council (GJEPC), said, "The remark is reckless and not supported by facts. Such an opinion by the highest authority at IDMA not only damages a member country but also affects the diamond trade at large and tarnishes its image globally. It is disheartening to note his appalling remark against India, time and again."

http://articles.timesofindia.indiatimes.com/2013-02-26/surat/37308806_1_diamond-industry-international-diamond-manufacturers-association-diamond-trade