Anglo American’s iconic diamond business De Beers says diamond sales grew 3 per cent globally last year – as did the Indian market in rupee terms. Longer term, however, De Beers, which sells both rough cut diamonds and retail diamonds in India, sees the country, alongside China, as its biggest potential growth market.

Stephen Lussier, an executive director of De Beers and head of its retail diamond brand ForeverMark, which opened in India in 2011, spoke to BusinessLine . Edited excerpts:

What is the diamond market in India looking like in 2015?

It is very early days but it is encouraging for us – in the first half of 2014, the market was slower, but in the second half, we saw improved confidence among consumers and in India in general. An improving fourth quarter encouraged us that 2015 will be even better for India.

What about longer term?

We certainly see great opportunities in India and China, markets with many similar factors. If we continue to see the macroeconomic growth that is forecast for the Indian market, it will lift more and more people into the market who are capable of buying diamonds, which will continue to lead to growth for us. People are increasingly interested in diamonds in gold jewellery – diamonds’ share of the jewellery market is on the increase.

Alongside macroeconomic factors, is it also a cultural shift away from gold?

Gold has traditionally been an investment – a tradable commodity and that is not what diamonds are about.

We do believe that it stores value and is an appreciating asset –and it’s important that people increasingly see it as an appreciating asset to buy – to keep and eventually pass it on to your family. We find that younger consumers increasingly think of it more as a beautiful part of jewellery – more and more as part of contemporary wearable jewellery.

Where does the growth largely lie in India – in large high-value diamonds or at the lower end?

There are two distinct markets – there is, of course, a market for very expensive large diamonds of one, two or three carat stones, which remains an important part of the Indian market, but it’s not the growth area.

The growth area is for young women who wear jewellery more often – and want something that is simpler in design and wearable on a regular basis.

How does India compare globally?

India is the third largest market for us in the world following the US and China.

India and the China will increase their position over time, though the US remains the leader for the foreseeable future.

What will you be focusing on to drive the Indian market in the immediate future?

There is a particular drive around building the ForeverMark – a very successful brand, and building our network with jewellers.

We also have the official opening of our International Institute of Diamond Grading and Research Centre – a diamond selecting and grading facility – in Surat at the end of the month. It is the single most technically advanced in the world and gives us a huge boost in terms of our ability to support Indian cutters polishers and partners.

Given growth prospects for demand particularly in India and China, can supply keep up with demand?

Longer term it’s a challenge, but in the medium term, De Beers is investing in new production – we have a new mine in Canada and are investing in new facilities in Botswana, which will allow us to maintain our supply. There is clearly an opportunity for prices to rise and we think that is the environment when we look to the medium to long term.

We think the long-term supply and demand dynamic is one thing that makes diamonds such a good investment.

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