Indian jewellery exporters are planning to acquire mines overseas to maintain the uninterrupted supply of rough diamonds to hold on to the country's status as the world's largest maker of cut and polished diamonds.

Industry representatives say India can no longer depend on imports of rough diamonds from select countries overseas to achieve sustainable exports growth in the gems and jewellery industry.

"Currently, our industry manufactures as many as 11 out of every 12 diamonds set in jewellery worldwide," said Bakul Mehta, chairman of the Gems and Jewellery Export Promotion Council, an industry umbrella group.

"The business is critically dependent on the availability of rough diamonds in the country. An uninterrupted supply of rough diamonds can only be assured if we move upstream and own mines ourselves," Mehta told IANS.

India's gems and jewellery exports have shot up from a meagre $25 million in 1966-67 to a staggering $15 billion in the fiscal year ended March 31, 2005. The industry contributes about 18 percent to the country's total exports.

Availability of a vast pool of cheap labour force, a big domestic market and the government's liberal policies have helped India carve a niche for itself in the diamond cutting and polishing business.

De Beers, which runs most of the diamond mines in South Africa, Namibia and Botswana, is one of the key suppliers of rough stones to India.

Commerce and Industry Minister Kamal Nath says his government would encourage Indian gems and jewellery industry players to acquire diamond mines overseas with a view to boosting export growth.

According to Kamal Nath, a government-appointed committee is exploring the possibility of liberalising norms for Indian companies investing in "extractable" businesses overseas, including diamond mines.      

Industry experts say local jewellery makers are also keen to form joint ventures with overseas diamond miners to assure a steady supply of rough stones to the local market.

"We have already established our presence globally in the cutting and polishing and retailing part of the diamond industry chain," said Marzin Shroff, president (marketing) of Suashish Diamonds Limited.

"For sustaining the high growth over the next few years, it will be crucial for us to establish a presence in all segments of the industry chain - right from the mines to the market," he added.        
                       
Mumbai-based Suashish Diamonds has a chain of 65 jewellery outlets in different parts of India. The company also exports to countries like the US, Europe, and the Middle East.

"Our intention is not to explore mines because that is not our core competency. But at that same time we need to move beyond cutting and polishing activity. A joint venture with an overseas miner can be a win-win situation," said Shroff.