Trade secrets

A funding crunch may finally force India’s secretive diamond industry to become more transparent

The industry needs to look for more financing options, for which it will need to open up and function less secretively.

The secrecy-obsessed Indian diamond industry, which accounts for 14 out of every 15 diamonds polished globally, is being forced to open up. The trigger is money: with traditional banking routes closing down due to concerns over mounting defaults, the $12-billion sector has to become more transparent to be able to tap new fund sources.

Finance is key for the Indian diamond sector, which cuts and polishes a billion pieces every year. It raises around $6 billion from India and $5.5 billion from international banking channels annually, according to the Gems and Jewellery Export Promotion Council, an industry group.

Largely owned and controlled by the Palanpur Jains, a close-knit community whose reach extends from Gujarat’s Surat to Antwerp in Belgium, it has mostly thrived on close business relations. Not unlike the old Jewish families that earlier dominated the trade.

There is an unwritten code among these families that encourages only close relatives and brethren to be part of the trade so that profits stay within the community.

Rough diamonds are mined in Africa, bought and sold in Antwerp, shipped to India for cutting and polishing and then exported to the luxury markets of Europe and the US for retail sale. The buying and shipping of roughs is typically done by family members who then ship the uncut stones to their extended family in India. These families own cutting and polishing units in Surat, India’s diamond hub, where skilled labour costs one-tenth of that in Europe and a fourth of China’s. Thus, a single entity can oversee the entire chain after mining, and reap the profits.

Losing shine

However, all that is set to change. The global economic slowdown, falling demand and, most importantly, mounting defaults by some companies in the Indian gems and jewellery industry have given banks the jitters. Most of these lenders are already reeling from large-scale defaults in other industries.

ABN Amro, Antwerp Diamond Bank, and Standard Chartered are among those who have either stopped lending to the sector or have significantly reduced their exposure to the business.

“There is the possibility that more banks may follow suit and exit this business,” said Anoop Mehta, president of the Bharat Diamond Bourse, a special exchange set up for the buying and selling of diamonds. “There is now the need to look at new finance options. But for that, diamond companies will have to become more transparent and open up.”

That is easier said than done.

For decades, most of these family-owned diamond firms have operated informally. Business orders were relayed by word of mouth while transactions were maintained through old, dense methods of book-keeping. Even buying and selling was done with informal cash payments made across cities by using select codes, a practice known as the angadia system.

“Even the old Jewish families that had moved to Belgium were ‘informally’ promised tax incentives by the then government, prompting these families to move from Israel to Belgium for the lure of easy business,” said one Mumbai-based trader who asked not to be named.

Such opacity just won’t cut it anymore. Accounts will have to be maintained and more disclosures, on the lines of corporate announcements made by listed companies, will have to be made. “The world is anyway moving toward such a system by having adopted global accounting systems,” said Bharat Diamond’s Mehta.

Banking methods such as channel financing and peer-to-peer lending, which are used internationally, will have to be adopted, in place of the more traditional method of collateral-based lending, where some asset is taken as security and a loan provided based on its value.

Under channel financing, a group of banks provide finance to all players in the entire chain of the diamond trade so that the flow of business is sustained. Peer-to-peer lending is primarily a low-cost online lending method.

“Large finance firms and even Indian financial institutions have been looking at these options. In fact, some firms have even tied up about $200 million to $300 million through channel financing,” said GJEPC chairman Praveenshankar Pandya.

But banks have been cautious as some of the larger firms had recently defaulted or have been hauled up for evading taxes. Last month, the Indian Express reported that the income tax department had conducted surprise surveys on the offices of the Gitanjali Group, one of India’s largest diamond companies.

“It’s an evolving industry now in India,” said Ernest Blom, president of the World Federation of Diamond Bourses and a veteran of the trade. “If smaller and mid-scale firms have to be brought up, then banks must also come forward to guide them.”

This article first appeared on Quartz.

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Swara Bhasker: Sharp objects has to be on the radar of every woman who is tired of being “nice”

The actress weighs in on what she loves about the show.

This article has been written by award-winning actor Swara Bhasker.

All women growing up in India, South Asia, or anywhere in the world frankly; will remember in some form or the other that gentle girlhood admonishing, “Nice girls don’t do that.” I kept recalling that gently reasoned reproach as I watched Sharp Objects (you can catch it on Hotstar Premium). Adapted from the author of Gone Girl, Gillian Flynn’s debut novel Sharp Objects has been directed by Jean-Marc Vallée, who has my heart since he gave us Big Little Lies. It stars the multiple-Oscar nominee Amy Adams, who delivers a searing performance as Camille Preaker; and Patricia Clarkson, who is magnetic as the dominating and dark Adora Crellin. As an actress myself, it felt great to watch a show driven by its female performers.

The series is woven around a troubled, alcohol-dependent, self-harming, female journalist Camille (single and in her thirties incidentally) who returns to the small town of her birth and childhood, Wind Gap, Missouri, to report on two similarly gruesome murders of teenage girls. While the series is a murder mystery, it equally delves into the psychology, not just of the principal characters, but also of the town, and thus a culture as a whole.

There is a lot that impresses in Sharp Objects — the manner in which the storytelling gently unwraps a plot that is dark, disturbing and shocking, the stellar and crafty control that Jean-Marc Vallée exercises on his narrative, the cinematography that is fluid and still manages to suggest that something sinister lurks within Wind Gap, the editing which keeps this narrative languid yet sharp and consistently evokes a haunting sensation.

Sharp Objects is also liberating (apart from its positive performance on Bechdel parameters) as content — for female actors and for audiences in giving us female centric and female driven shows that do not bear the burden of providing either role-models or even uplifting messages. 

Instead, it presents a world where women are dangerous and dysfunctional but very real — a world where women are neither pure victims, nor pure aggressors. A world where they occupy the grey areas, complex and contradictory as agents in a power play, in which they control some reigns too.

But to me personally, and perhaps to many young women viewers across the world, what makes Sharp Objects particularly impactful, perhaps almost poignant, is the manner in which it unravels the whole idea, the culture, the entire psychology of that childhood admonishment “Nice girls don’t do that.” Sharp Objects explores the sinister and dark possibilities of what the corollary of that thinking could be.

“Nice girls don’t do that.”

“Who does?”

“Bad girls.”

“So I’m a bad girl.”

“You shouldn’t be a bad girl.”

“Why not?”

“Bad girls get in trouble.”

“What trouble? What happens to bad girls?”

“Bad things.”

“What bad things?”

“Very bad things.”

“How bad?”


“Like what?”


A point the show makes early on is that both the victims of the introductory brutal murders were not your typically nice girly-girls. Camille, the traumatised protagonist carrying a burden from her past was herself not a nice girl. Amma, her deceptive half-sister manipulates the nice girl act to defy her controlling mother. But perhaps the most incisive critique on the whole ‘Be a nice girl’ culture, in fact the whole ‘nice’ culture — nice folks, nice manners, nice homes, nice towns — comes in the form of Adora’s character and the manner in which beneath the whole veneer of nice, a whole town is complicit in damning secrets and not-so-nice acts. At one point early on in the show, Adora tells her firstborn Camille, with whom she has a strained relationship (to put it mildly), “I just want things to be nice with us but maybe I don’t know how..” Interestingly it is this very notion of ‘nice’ that becomes the most oppressive and deceptive experience of young Camille, and later Amma’s growing years.

This ‘Culture of Nice’ is in fact the pervasive ‘Culture of Silence’ that women all over the world, particularly in India, are all too familiar with. 

It takes different forms, but always towards the same goal — to silence the not-so-nice details of what the experiences; sometimes intimate experiences of women might be. This Culture of Silence is propagated from the child’s earliest experience of being parented by society in general. Amongst the values that girls receive in our early years — apart from those of being obedient, dutiful, respectful, homely — we also receive the twin headed Chimera in the form of shame and guilt.

“Have some shame!”

“Oh for shame!”




“Do not bring shame upon…”

Different phrases in different languages, but always with the same implication. Shameful things happen to girls who are not nice and that brings ‘shame’ on the family or everyone associated with the girl. And nice folks do not talk about these things. Nice folks go on as if nothing has happened.

It is this culture of silence that women across the world today, are calling out in many different ways. Whether it is the #MeToo movement or a show like Sharp Objects; or on a lighter and happier note, even a film like Veere Di Wedding punctures this culture of silence, quite simply by refusing to be silenced and saying the not-nice things, or depicting the so called ‘unspeakable’ things that could happen to girls. By talking about the unspeakable, you rob it of the power to shame you; you disallow the ‘Culture of Nice’ to erase your experience. You stand up for yourself and you build your own identity.

And this to me is the most liberating aspect of being an actor, and even just a girl at a time when shows like Sharp Objects and Big Little Lies (another great show on Hotstar Premium), and films like Veere Di Wedding and Anaarkali Of Aarah are being made.

The next time I hear someone say, “Nice girls don’t do that!”, I know what I’m going to say — I don’t give a shit about nice. I’m just a girl! And that’s okay!

Swara is a an award winning actor of the Hindi film industry. Her last few films, including Veere Di Wedding, Anaarkali of Aaraah and Nil Battey Sannata have earned her both critical and commercial success. Swara is an occasional writer of articles and opinion pieces. The occasions are frequent :).

Watch the trailer of Sharp Objects here:


This article was published by the Scroll marketing team with Swara Bhasker on behalf of Hotstar Premium and not by the Scroll editorial team.