Sunday, June 28, 2009

Diamonds and MIFC

Pallavi Aiyar has an article in Business Standard on Indian entrepreneuers and the Antwerp diamond trade. You might like to also see this. She ends the piece on an MIFC theme saying:

Many within Antwerp's Indian community share this prognosis. "In Israel, Muslims are not welcome, in Dubai, Westerners don't always have an easy time, in Hong Kong, it's primarily the Chinese, and in Mumbai, it's Indians," says Mihir Shah of Jayam NV. "India is simply not so open for foreigners to come and work and this is something essential to the diamond business."

Its lack of multiculturalism is not the only obstacle to the success of Mumbai's bid to replace Antwerp. It is also plagued by lax security, sluggish bureaucracy, lengthy red tape, in addition to lacking the infrastructure, physical and financial, to support the international diamond trade. The Bharat Diamond Bourse project, intended as a one-stop shop and dedicated custom house for the trade, has taken almost two decades to complete. Value added tax has to be paid - only to be returned, although only after the government has held on to it for a while. "In Mumbai, you still have to pay octroi, and it isn't possible to import or export goods on consignment," complains Jayam's Shah.

Antwerp's Gujarati traders are quick to voice their appreciation of a slew of helpful policies the Indian government has implemented in recent years, including the removal of duties on the import of polished diamonds. But when asked about Mumbai's prospects as a leading hub in the business, they smile uncomfortably and shake their heads.

While on the subject of Bombay, see Aakar Patel on how Bombay happened, and on Surat.

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