Indians globalised the diamond

ANTWERP: As Antwerp’s electronically fortified diamond square mile lulls to a close on a typically grey evening, Indian businessmen dressed in crisp Italian couture seal multi-million dollar diamond deals with a simple handshake and a muttered Yiddish word Mazal — meaning luck — an age-old custom they learnt from their fellow Jewish counterparts.

They lock up their bullet proof diamond vaults and drive home in BMWs to their posh villas. Diamonds had been changing hands in Belgium’s port city long before the Indians arrived and Jews controlled 80 per cent of the trade. Since the 15th century, Jewish diamond cutters have been faceting diamonds and traders have been selling them on Hovenierstraat, the heart of Antwerp’s diamond zone until the 1960s, when a small community of Jain Gujarati Indians hailing from the small farming town of Palanpur understood the concept of cheap manufacture and global sourcing  long before they became buzz words in the business world.

They made many a fortune in small and low quality industrial rough diamonds that Jewish merchants overlooked. However, Jews and Indians are so embedded in each other’s lives that many of the Indian dealers speak Hebrew and Yiddish while negotiating deals. “The Indian community has been part of the growth of the Jewish business and vice-versa. We are both from conservative religions and have similar cultural and traditional values,” says Chetan Choksi, Managing Director of Diminco. Indians democratised and globalised the diamond and a mutually beneficial marriage between the diamond mining giant De Beers and the Indians ensued.

Today, Antwerp has become Mumbai’s suburb. Around 500 Indian families control 60 per cent of Antwerp’s rough and polished diamond trade that was worth Euro 26 billion in 2005, contributes to 8 per cent of Belgium’s exports and employs 30,000 people.

Diamond cutting has shifted to cost-effective centres like India and to a lesser extent, China. Surat is now the world’s diamond cutting capital and diamonds are India’s largest export. Indian businesses now manufacture larger stones leading up to 5 carats and are vertically integrating right down the value chain to the production of jewellery. Some have even set up manufacturing facilities in China, Thailand, South Africa and Russia.

Large family networks are key to the Indian success in an industry shrouded in secrecy, guaranteed by trust, and where current assets are transported half way across the world as packets of small  sparklers worth millions.

The trade is supported by two highly specialised diamond financing banks (ABN AMRO and Antwerp Diamond Bank) and strong government institutions like the Diamond high Council (HRD). Offices of major diamond mining companies, De Beers, Rio Tinto, Alrosa and BHP have secured Antwerp’s position as a world diamond centre. Indian banks such as the State Bank of India and ICICI are also set up here to cater to the Indians’ escalating business needs. Bank of India is set to make its debut in Antwerp next year.

In May 2006, thanks to the government’s unflinching pro-business support, diamantaires from India gained a historic political victory when they won five of the 12 seats on the board of the industry’s key government organisation, the Diamond High Council, breaking the monopoly that Jewish traders had on the board for centuries.

Earlier, Jewish traders were nominated to the board until the government ordered democratic and direct elections for the first time ever to reflect changing economic realities. “Indians got involved to make sure that they have an adequate legal and fiscal framework so that we can work here in a proper environment,” said Dilip Mehta, CEO of Rosy Blue the world’s largest diamond company.