- Times Crest: The last edition
July 20, 2013
We thank all our Crest readers for their loyalty as the weekend paper brings you its last edition.
- The crorepati writer
July 20, 2013
He's the man who gives Big B his lines. RD Tailang, the writer of KBC.
- Cruise control
July 20, 2013
We are educating girls, raising their aspirations, even giving them a taste of professional life, and then asking them to rein in their ambitions.
- In This Section
- Entire Website
From the Times Of India
- MOST POPULAR
Jaipur's jewels lose their sparkle
Unable to get their hands on good-quality gems due to competitors in China and Thailand, the city's gem cutters and jewellers are using fake and resin-coated stones.
In a modern, air-conditioned office away from the dusty roads where honking cars and motorbikes swerve around camel-driven carts, Gagan Choudhary squinted at an emerald through a spectroscope: Like most of the green stones sent to his laboratory these days, it would turn out to be not quite what it seemed.
"It's like detective work, " he said. "Every stone is different. Some are so sophisticated that in some cases we spend at least two hours on an emerald. "
As deputy director and head tester at Gem Testing Laboratory in Jaipur, Choudhary sifts through thousands of colored stones each year, determining whether they are natural, laboratory-created, or treated with resin and injected with color to give a false brilliance.
The outcome: Nearly 95 per cent of the emeralds, 99 per cent of rubies and at least half of the sapphires tested these days are, in one way or another, unnatural, he said in an interview.
Artificial treatment is not uncommon to correct flaws in gems, but it is illegal if not properly disclosed to buyers.
Amid soaring prices in the global marketplace for top-quality colored stones, Jaipur's gem cutters and jewellers have increasingly found themselves outbid for supplies by larger and better-financed rivals, and some are turning to subterfuge to make good the shortfall.
For centuries, Jaipur attracted the world's best gems to be cut, polished and mounted, a tradition harking back to the early 18th century when the ruling Maharaja Sawai Jai Singh II founded the city as the capital of Rajasthan. A dedicated patron of the arts, he drew the best artisans from all over India to craft jewelled sword hilts, pendants, earrings - even ankle bracelets for the royal elephants. Over time, Jaipur's craftsmen earned a reputation for their skill in cutting particularly brittle stones like emeralds.
But that heritage is now under threat from a combination of shifting market forces and new competitors, notably in China and Thailand. In an expanding market for colored gems, fueled by the wealth of emerging economies and now worth an estimated $10 billion a year, Jaipur's craft industry is being muscled aside by big companies that can effectively control supply and prices with their financial and marketing firepower.
"There's a real shift in global power, " said Alexander Mees, a colored gem expert at JPMorgan Cazenove. "The colored gem market is still fragmented and less mature than diamonds, so we're likely to see more large-scale companies as consumer preferences rise. "
Gemfields, for example, based in London and 48 per cent owned by the private equity group Pallinghurst, controls 28 per cent of the world's supply of emeralds through its Kagem mine in Zambia. It markets its gemstones through the luxury brand Fabergê, which Pallinghurst merged into it in January.
Diamonds historically had the largest share in gems, but growing demand, particularly from emerging markets, has pushed companies to seek new opportunities in colored stones.
"The high end of the industry is very strong, as rich customers are looking for new stones people have never heard of, like rubellite, green garnet or spinel, " said Jean-Claude Michelou, vice president of the International Colored Gemstone Association, who is a World Bank consultant. "People are looking for exceptional, rare, big stones. "
Meanwhile, auctions have seen record-breaking sales as clients from the Middle East and China snap up gemstones as investment assets.
Marketing efforts by giants like Gemfields have helped smaller miners who have seen prices for their stones rise - often to levels beyond the reach of some of Jaipur's businesses. Traditionally, Jaipur's gem buyers procured stones directly and individually from miners and rough-stone dealers. Now, increasingly obliged to compete at auction, they are having to band together to bid jointly against bigger rivals - and still ending up as underbidders for the better quality stones.
Faced with all these challenges, Jaipur's industry is fighting a rearguard action for survival.
"We don't want Jaipur's 300-year-old gem business to disappear, " said Rajiv Jain, a former chairman of India's Gem and Jewelry Export Council, who has led efforts to restore the country's high status in the industry.
Squeezed out of the market for high-grade gems, some jewellers have resorted to treating the stones with heat or resin in order to raise their value, without disclosing the treatments to unsuspecting buyers.
Local media last year reported a "crisis of confidence" in Jaipur after a string of scandals in the city's legendary Johri Bazaar, where resin-coated gems were allegedly sold as untreated.
Choudhary of Gem Testing Laboratory said the number of gems sent by wary buyers to his lab for testing had soared in the past year.
Michelou said he was working on a global certification and tracking system for colored gemstones similar to the one already in place for diamonds. "Jaipur is now in the middle jewellery market - and it is very difficult for businesses because the market for them is gone, " he said.
Chitan Sharma, head of a family jewellery business that used to include several celebrities among its clients, said profit had been halved by the financial crisis in Europe - particularly in Spain, which used to be an important market - and the high price of gold. To survive, he said, his company fired some workers and switched to 9-carat gold from 18-carat for its gem settings.
China has risen as a serious competitor, setting up cutting centers and jewellery manufacturing facilities, and buying stones in bulk to take advantage of economies of scale. "In opaque stones, China has taken over, " Jain of the export council said.
Bangkok and Hong Kong have also developed as important stone-cutting hubs, while mining countries like Tanzania are increasingly developing local cutting expertise to capture value-added revenue. In 2003, Tanzania introduced legislation banning exports of raw tanzanite to India, its biggest importer.
Jain, who in the 1990s pioneered the cutting and polishing of the blue-violet gemstone in Jaipur, said he was trying to break the impasse with the Tanzanian government by offering to train Tanzanian students in Jaipur. "I've told them, 'Treat us as your partners', " he said. "Three hundred years of history and experience cannot be made in three years. "
He is also trying to change mentalities in India, where many people value certain gemstones over others purely for astrological reasons, and prize clarity or cut less than Western buyers. "We need to market our identity better in India, " he said.
He is also urging the government to step up exploration for new gemstone deposits, building on efforts in the past decade to open up new diamond fields.
The Indian government granted a license to Rio Tinto in 2011 to mine diamonds in Madhya Pradesh, and the local government gave the green light to start development in 2012. Rio Tinto began exploring for diamonds in Madhya Pradesh in 2001 and discovered diamond-bearing lamproites, or volcanic rocks, in the Bundelkhand region of the state in 2004 - the first new find in India in more than 40 years.
"In the future - who knows? - new stones may be discovered, " Jain said. "And as long as there are women on the face of this earth, there will be demand. I'm an optimist. Jaipur will become stronger. But we have to fight every day. " At the testing lab, whenever a big, pure emerald does come his way, Choudhary says he takes his time to marvel at it. "It's a feeling you cannot express, " he said, taking a deep breath.
Register for Full Access to the Crest Edition
Don't have a Facebook Account? Sign up for Times Crest here.