After the quiescence of the established markets, diamond market spotlight is slowly shifting on many Central and East European nations, which are focusing on the diamond market and gearing to play a greater role in the industry. Developments in Turkey, Ukraine, Armenia etc. are indicative of this progression.
Turkey’s jewelry exports topped USD 4.5 billion in 2014, a 28% increase. Of this, around 30% was diamond exports, which has doubled from earlier composition. Turkey houses more than 25,000 jewelry retail stores and jewelry market is considerably getting important for the country’s economy. Though much of the jewelry segment is still gold, silver and manufacturing oriented, Turkish government, as a part of its 10-year strategy for 2023, is planning to make Istanbul a jewelry and diamond hub.
To further this ambition, Turkey has abolished special consumption tax of 20% on polished diamond imports and has exempted members of its diamond bourse – Borsa Istanbul Diamond and Precious Stone Market, from 18% VAT on polished diamond trading. In a recent interview, Ayhan Guner, Chairman – Turkish Jewellery Exporters Association, which has 1,380 jewelry manufacturers members with size range of USD 100,000 to USD 100 million exports, mentioned that Turkey has greater than 10,000 small jewelry workshops and is poised to cater tailor-made orders and large-scale contract manufacturing, unlike the find-buy-leave model in traditional diamond centers like Belgium, Israel and India.
Besides, apart from the key trades with bigger diamond markets of US, Gulf, Germany, Russia etc., Turkey also focuses and has developed unique proposition of trading with former soviet countries like Azerbaijan, Kazakhstan; Iran, Iraq, North Africa etc. – markets that conventional trading centers do not consider.
Seeing the rising importance of country in diamond industry, De Beers‘ brand – Forevermark, expanded into Turkey by appointing Zen Diamonds as its local licensee partner.
Ukraine, after going through political and economic turmoil, is desperate to increase ties with the western economies. In past year, input gold prices have tripled in Ukraine with similar increase for silver and diamond prices too. Though at the moment, Ukraine’s jewelry industry is facing crisis, it is adjusting for a bigger diamond market.
Armenia too, after its agreement with ALROSA last year, has taken several policy measures including exemption of 6.5% import duty on roughs from Russia, abolishment of 20% VAT on imported diamonds etc., in a hope to regain its sparkle in the diamond market.
Similarly, many other Eastern Europe countries are increasing their attention towards diamond market for more growth opportunities.