Back when Britannia ruled the waves, the country’s imperial cuisine found its way onto the dining tables of its colonial cousins located in distant lands. Likewise, in Antwerp, the 500-year old Jewish monopoly in the gem trade has meant that restaurants and cafeterias in this Belgian port city have served ample varieties of kosher food over the years. But lately, spicy Indian curries have hit Antwerp’s menus. There is a new kid on the block.
Indeed, according to a report in PressEurop, about 80% of the diamond trade in Antwerp is now handled by Indian dealers. More than anything else, it is their strong family ties that enable the Indian traders to maintain their stranglehold over the business. The report points out that a majority of the market is controlled by the 300 to 400 Indian families who own the largest businesses in a sector that recorded sales of €22 billion in 2009.
These Indian entrepreneurs, who have emerged as the maharajahs of the diamond trade in Antwerp, had already made their name and money in the gem cutting business back home. The migration to Antwerp of the Mehtas, the Jahwerys, and the Shahs, most of them hailing from the Palanpur region in the western Indian state of Gujarat, began as a mere trickle in the 1950s but became a strong current in the 1970s and 80s, boosted in part by the possibility of making even greater profits and Belgium’s liberal immigration laws. Preferring to marry among themselves, these hard-nosed businessmen, most of them belonging to the vegetarian Jain community, built huge, closely-knit networks worldwide. And using this vast family network, they never hesitated to set up shop somewhere else if it offered them better prospects.
Indian merchants and diamond cutters may have made their fortune in a foreign land, but times have not exactly been glittering for global diamond trading and manufacturing. The last decade saw the industry being rocked by allegations of sourcing “blood diamonds,” or the funding of civil wars through the sale of precious stones mined in Africa. Antwerp’s status as the hub of global diamond trade has also come under threat. Most of the cutting and polishing jobs have been going to other Asian markets such as Surat and Mumbai in India, as well as to China. Dubai in the Middle East is now emerging as a major center of the diamond trade, thanks in part to the country’s geographical proximity to the two big Asian BRIC economies, and the 50-year tax holiday offered to companies hanging up a shingle.
The sector, hitherto dominated by De Beers, has undergone quite a bit of churning, with the majority ownership of the company passing into the hands of precious metals miner Anglo American Plc. Mining companies such as Russia’s Alrosa and Canadian group Harry Winston have also thrown their hats into the ring, while BHP Billiton and Rio Tinto want to divest their diamond portfolios. Still, De Beers accounts for about 35% of the global diamond market, as an FT report said.
The businesses associated with the extraction and processing of the world’s hardest natural substance are bound to thrive even in these uncertain economic times. A report in the Financial Times points to the sharp increase in demand from China, where the share of Chinese brides who adorn their fingers with diamond engagement rings has risen sharply during the past two decades beginning in 1990. In India too, elaborate wedding celebrations are incomplete without the bejeweled bride basking in the reflected glory of her sparkling diamond necklace.
Diamond dealers now pin their hopes on the second half of the year, helped by an improvement in retail sales in Asia and in the U.S., the largest market for gems. Lack of supply also augurs well for the sale of rough cut gems, which are not traded on exchanges. With no significant diamond find in the last decade and a long gestation period that averages about eight years, the procurement issue alone will likely support the premium pricing of the elusive treasure in the long term. As the FT article points out, the four Cs of carat, color, cut, and clarity continue to play a significant role in determining the price of a diamond.
Despite the emergence of other processing centers, about 80% of the world’s rough diamonds still pass through Antwerp, according to a report in the Financial Times. Unearthed in Africa or Australia and shaped to perfection by Jewish and now Indian hands in this Belgian port, the gem stone and the buzzing industry surrounding it symbolize the changing dynamics of flourishing global trade, giving new meaning to the tagline “A Diamond is Forever.”
Postcards from Around the World
Subscribe to get our global publications by email.