The Government of India’s (GoI) Cabinet Committee on Economic Affairs (CCEA) announced yesterday that it had “given its approval for initiating the process of winding up of Hindustan Diamond Company Private Limited (HDCPL)”.

HDCPL is a 50:50 joint venture between the GoI and De Beers Centenary Mauritius Limited (DBCML), which was incorporated  in 1978. The avowed  purpose and objective of setting up the company was to supply rough diamonds to the rapidly growing diamond manufacturing industry in India.  In those days, De Beers  was primary supplier of rough diamonds, and its distribution  system was mainly based on the sightholder system.   However, as most sightholders were big companies with extensive manufacturing facilities,  some  companies were given “dealer” sights – HDCPL amongst them – so that they in turn could sell rough into the market.  This was done to ensure a supply of goods to small and medium players. 

“The winding up of HDCPL is not likely to affect supply of rough diamonds to Indian diamantaires as Indian diamond industry has grown in these years and several Indian players are sightholders with top diamond producers now,” said the press statement of the CCEA. “Also, with the objective to facilitate the constant supply of rough diamonds and to make India an International Diamond Trading Hub, the Government has created a Special Notified Zone (SNZ) at Bharat Diamond Bourse, Mumbai in 2015. At present viewing operations are being carried out in the SNZ at Mumbai wherein Foreign Mining Companies (FMCs) only display their rough diamond lots to the Indian manufacturers and then take them back. Thereafter the sales are carried through e-auction from offices situated in other countries to Indian manufacturers. This facility has enabled even smaller  Indian players to have direct access of supply of rough diamonds.”