[For centuries, Jaipur
attracted the world’s best gems to be cut, polished and mounted, a tradition
harking back to the early 18th century when the ruling Maharaja Sawai Jai Singh
II founded the city as the capital of Rajasthan. A dedicated patron of the
arts, he drew the best artisans from all over India to craft jeweled sword
hilts, pendants, earrings — even ankle bracelets for the royal elephants. Over
time, Jaipur’s craftsmen earned a reputation for their skill in cutting
particularly brittle stones like emeralds.]
By Kimiko De Freytas-Tamura
 |
Kimiko de Freytas-Tamura
Gagan Choudhary, head tester at Gem Testing Laboratory in Jaipur.
He says it can take hours to determine the quality of a stone.
|
JAIPUR, INDIA — In a modern, air-conditioned office away from the dusty roads
where honking cars and motorbikes swerve around camel-driven carts, Gagan
Choudhary squinted at an emerald through a spectroscope: like most of the green
stones sent to his laboratory these days, it would turn out to be not quite
what it seemed.
“It’s like detective
work,” he said. “Every stone is different. Some are so sophisticated that in
some cases we spend at least two hours on an emerald.”
As deputy director and
head tester at Gem Testing Laboratory in Jaipur, Mr. Choudhary sifts through
thousands of colored stones each year, determining whether they are natural,
laboratory-created, or treated with resin and injected with color to give a
false brilliance.
The outcome: Nearly 95
percent of the emeralds, 99 percent of rubies and at least half of the
sapphires tested these days are, in one way or another, unnatural, he said in
an interview.
Artificial treatment is
not uncommon to correct flaws in gems, but it is illegal if not properly
disclosed to buyers.
Amid soaring prices in
the global marketplace for top-quality colored stones, Jaipur’s gem cutters and
jewelers have increasingly found themselves outbid for supplies by larger and
better-financed rivals, and some are turning to subterfuge to make good the
shortfall.
For centuries, Jaipur
attracted the world’s best gems to be cut, polished and mounted, a tradition
harking back to the early 18th century when the ruling Maharaja Sawai Jai Singh
II founded the city as the capital of Rajasthan. A dedicated patron of the
arts, he drew the best artisans from all over India to craft jeweled sword
hilts, pendants, earrings — even ankle bracelets for the royal elephants. Over
time, Jaipur’s craftsmen earned a reputation for their skill in cutting
particularly brittle stones like emeralds.
But that heritage is now
under threat from a combination of shifting market forces and new competitors,
notably in China and Thailand. In an expanding market for colored gems, fueled
by the wealth of emerging economies and now worth an estimated $10 billion a
year, Jaipur’s craft industry is being muscled aside by big companies that can
effectively control supply and prices with their financial and marketing
firepower.
“There’s a real shift in
global power,” said Alexander Mees, a colored gem expert at JPMorgan Cazenove.
“The colored gem market is still fragmented and less mature than diamonds, so
we’re likely to see more large-scale companies as consumer preferences rise.”
Gemfields, for example,
based in London and 48 percent owned by the private equity group Pallinghurst,
controls 28 percent of the world’s supply of emeralds through its Kagem mine in
Zambia. It markets its gemstones through the luxury brand Fabergé, which
Pallinghurst merged into it in January.
Diamonds historically
had the largest share in gems, but growing demand, particularly from emerging
markets, has pushed companies to seek new opportunities in colored stones.
“The high end of the
industry is very strong, as rich customers are looking for new stones people
have never heard of, like rubellite, green garnet or spinel,” said Jean-Claude
Michelou, vice president of the International Colored Gemstone Association, who
is a World Bank consultant. “People are looking for exceptional, rare, big
stones.”
Meanwhile, auctions have
seen record-breaking sales as clients from the Middle East and China snap up
gemstones as investment assets.
Marketing efforts by
giants like Gemfields have helped smaller miners who have seen prices for their
stones rise — often to levels beyond the reach of some of Jaipur’s businesses.
Traditionally, Jaipur’s
gem buyers procured stones directly and individually from miners and
rough-stone dealers. Now, increasingly obliged to compete at auction, they are
having to band together to bid jointly against bigger rivals — and still ending
up as underbidders for the better quality stones.
Faced with all these
challenges, Jaipur’s industry is fighting a rearguard action for survival.
“We don’t want Jaipur’s
300-year-old gem business to disappear,” said Rajiv Jain, a former chairman of
India’s Gem and Jewelry Export Council, who has led efforts to restore the
country’s high status in the industry.
Squeezed out of the
market for high-grade gems, some jewelers have resorted to treating the stones
with heat or resin in order to raise their value, without disclosing the
treatments to unsuspecting buyers.
Local media last year
reported a “crisis of confidence” in Jaipur after a string of scandals in the
city’s legendary Johri Bazaar, where resin-coated gems were allegedly sold as
untreated.
Mr. Choudhary of Gem
Testing Laboratory said the number of gems sent by wary buyers to his lab for
testing had soared in the past year.
Mr. Michelou said he was
working on a global certification and tracking system for colored gemstones
similar to the one already in place for diamonds. “Jaipur is now in the middle
jewelry market — and it is very difficult for businesses because the market for
them is gone,” he said.
Chitan Sharma, head of a
family jewelry business that used to include several celebrities among its
clients, said profit had been halved by the financial crisis in Europe —
particularly in Spain, which used to be an important market — and the high
price of gold. To survive, he said, his company fired some workers and switched
to 9-carat gold from 18-carat for its gem settings.
China has risen as a
serious competitor, setting up cutting centers and jewelry manufacturing
facilities, and buying stones in bulk to take advantage of economies of scale.
“In opaque stones, China
has taken over,” Mr. Jain of the export council said.
Bangkok and Hong Kong
have also developed as important stone-cutting hubs, while mining countries
like Tanzania are increasingly developing local cutting expertise to capture
value-added revenue. In 2003, Tanzania introduced legislation banning exports of
raw tanzanite to India, its biggest importer.
Mr. Jain, who in the
1990s pioneered the cutting and polishing of the blue-violet gemstone in
Jaipur, said he was trying to break the impasse with the Tanzanian government
by offering to train Tanzanian students in Jaipur.
“I’ve told them, ‘Treat
us as your partners,”’ he said. “Three hundred years of history and experience
cannot be made in three years.”
He is also trying to
change mentalities in India, where many people value certain gemstones over
others purely for astrological reasons, and prize clarity or cut less than
Western buyers.
“We need to market our
identity better in India,” he said.
He is also urging the
government to step up exploration for new gemstone deposits, building on
efforts in the past decade to open up new diamond fields.
The Indian government
granted a license to Rio Tinto in 2011 to mine diamonds in Madhya Pradesh, and
the local government gave the green light to start development in 2012. Rio
Tinto began exploring for diamonds in Madhya Pradesh in 2001 and discovered
diamond-bearing lamproites, or volcanic rocks, in the Bundelkhand region of the
state in 2004 — the first new find in India in more than 40 years.
“In the future — who
knows? — new stones may be discovered,” Mr. Jain said. “And as long as there
are women on the face of this earth, there will be demand. I’m an optimist.
Jaipur will become stronger. But we have to fight every day.”
At the testing lab,
whenever a big, pure emerald does come his way, Mr. Choudhary says he takes his
time to marvel at it.
“It’s a feeling you
cannot express,” he said, taking a deep breath.
