Indian Production and Jewellers’ Responsibility

Isaac Mostovicz writes that growing the diamond industry again after the downturn will be problematic because workers will be lost to the industry once they leave...

The Indian Reserve Bank recently set up a task force to look into “distress arising on account of problems faced by diamond industry.” While there is still demand for goods from the diamond industry, nobody really know what exactly the demand is. In addition, once workers leave the diamond industry, they will not come back so easily, especially if they find work elsewhere. I believe that growing the industry again after the downturn will be problematic. Since India controls about 60% of the market, a serious reduction in production there will have a great effect on the producing companies: they’ll soon suffer from cash flow issues.

My colleague Randy believes that it’s good that the Indian industry is at least acting. He says:

One sure way to correct is to cut off the new inputs of polish into the pipeline. It is painful, but necessary. Attitude change is also a necessary step–I now see this as a major impediment at the retail end. The jeweler is still arrogantly treating the supplier like a banker with free interest. This is driving me crazy, and the shift is coming around the bend: I’m starting to hear cries from jewellers of not being able to get their hands on merchandise.  My wish would be that all suppliers would pull back and only release goods to people who are truly credit worthy.

I agree with Randy’s assessment–the jewellers’ attitude is what concerns me most. This is not arrogance though; rather, it’s a problem of responsibility. Since jewellers were educated by their suppliers that they do not have to take any responsibility for their actions (as long as they pay at the end of the day), they would not like to have to start acting responsibly now. This is actually the reason for the current economic crisis, when actors did not have to take any responsibility for their actions. We had lenders who did not check the risk, risk controllers who never met the borrower and the entire industry that hid behind regulations and rules. Lack of responsibility leads always to unethical behaviour.

[…] – Indian “companies and jewelers responsibility.” […]

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