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Indians snatch diamond crown

May 8: A group of Indian expatriates has gained significant control over the world’s largest trade in uncut diamonds, fashioning a shift of power in the sector after a bitter battle with local Jewish traders.

Indian diamond traders won five of the six elected seats last week on the 11-member board of the Diamond High Council or Hoge Raad Voor Diamant (HRD) in Antwerp, Belgium, ending decades of under-representation.

The coup in the globe’s rough diamond capital means the Indians’ say on the market will mirror their already impressive economic might.

Today, Indians control 60-65 per cent of the Flemish port city’s rough and polished diamond trade ' worth $36 billion (Rs 1,62,000 crore) in 2006 ' which had been dominated by Jews since the 15th century.

The Indian success story ' compared by The Wall Street Journal three years ago to the country’s rise in IT ' began in the 1970s. Around 500 families, mainly Jains from the Gujarat town of Palanpur, arrived in Antwerp, where 90 per cent of the world’s uncut diamonds and half of its polished diamonds are sold each year.

They quickly absorbed technical diamond manufacturing skills and globalised the trade, expanding their business to New York, California and Hong Kong and posing a challenge to the Jewish traders, forbidden by their religion from working on Saturdays and Sundays.

The Indians started by taking up the smaller, lower-quality rough diamonds that their rivals ignored and cutting and polishing them. They then began outsourcing their uncut diamonds to Mumbai and Gujarat for finishing work in family-owned units at a fifth of the wages prevalent in Antwerp.

This ensured that about 80 per cent of all polished diamonds sold globally passed through Indian hands.

Yet it was the Jews ' whose market share fell from 70 to 25 per cent ' who dominated the HRD, the umbrella body that governs and represents the city’s diamond trade.

As Indians lobbied hard demanding a voice on the board, the issue took ethnic dimensions and Belgium Prime Minister Guy Verhofstadt had to step in. He assigned a working group to the HRD and called for a restructuring of the body, offering more balanced representation.

Commenting on last week’s election, Shashin Choksey, general secretary of the Indo-Belgian Diamantaire Association, said, “We have to now put ethnic differences aside and work for the future of Antwerp.”

HRD has also been wracked by wrangling between bigger and smaller market players and party politics for over a year.

The issue split the HRD, leaving it paralysed by the resignation of key players ' thus providing another reason for a revamp.

“The HRD hopes the internal friction of the last year will be done (away) with as the diamond dealers are now directly involved in the organisation, and that peace in the diamond sector will be restored,” HRD spokesperson Philip Claes said.

“The actual composition of the board of directors, where five of the' mandates are filled by the members of the Indian community, is a more correct reflection of the relations within the sector.”

The country that produced the Kohinoor had been the world’s largest diamond supplier till the discovery of deposits in Brazil and South Africa in the 18th century. The world’s first diamonds are believed to have been discovered in India in the ninth century BC.

Written with an India News in Europe Programme (INEP) report

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