India is the biggest diamond cutting and manufacturing centre in the world. The market size worth Rs 80,000 crore of polished diamonds per annum. Basically, Gujarat, Surat and Mumbai hold the major market share of the industry. The diamond processing sector of our country is a flourishing industry. And any individual can start a medium or large scale diamond processing and polishing unit with moderate capital investment. Here in this article, we intend to explore how to start a small scale diamond cutting and polishing business.
The overall success of this business majorly depends on the quality of work and investment capacity. Therefore, you have to put the investment in purchasing right machines and hiring experienced manpower.
If you are a beginner, it is advisable to study the industry first. You must know the trade and current industry activities. Then only you can prepare a SWOT analysis. Basically, you need to identify the specific demand, the competitors and the potential clients.
Diamond Cutting & Polishing Market Potential
The demand for the diamond jewellery is increasing in the both metro cities and small towns populations. And the consumer preferences will continue to evolve. However, innovation by global luxury brands and new online propositions will generate strong competition for the industry.
Basically, economic empowerment ensures self-purchases especially among women. And it will rise the demand for lower entry-point diamonds. According to the experts, the polished diamond value is expected to expand at a CAGR of 4% between 2016 and 2022. Therefore, starting a diamong cutting and polishing business is a highly lucrative opportunity for the entrepreneurs.
Diamond Cutting & Polishing Business Compliance
A medium scale diamong processing unit demands specific registration and licenses from the several Govt. authority. It is advisable to check your state law. However, here we have compiled some of the basic requirements.
- First, you have to register the business. It is better to form an LLP, Pvt. Ltd or Ltd company.
- Then apply for Trade License to the local authority.
- Apply for company Pan Card.
- Obtain Professional Tax Registration
- Open a current bank account for the business transaction.
- Apply for Trademark for securing the brand name of your company.
- You must apply for IEC code from DGFT (Directorate General of Foreign Trade). Because, you have to import the rough diamond from the other countries.
- Finally, check the upcoming tax liabilities of your business.
After starting the business apply for the membership of Gems and Jewellery Export Promotion Council (GJEPC).
Finance For Diamond Cutting & Polishing Unit
The business demands substantial capital investment. And there are several option for securing the paid up capital of your company. Generally, in this type of conventional business, it is little hard to secure the fund from the angel investors or venture capitalists. However, you can have a try if you have a recommended one.
Otherwise, you can secure the funding from your business partners as equity participation. Additionally, you can also approach banks for financing your project. Additionally, you must look for Government subsidy schemes if there is any.
Diamond Cutting & Polishing Plant Setup & Machinery
In establishing the unit, you have to secure a workspace first. Actually, area requirement entirely depends on the business size. However, you can start a medium scale unit with 1000 Sq Ft built up space.
Additionally, you have to ensure commercial electricity connection for running the machinery. It is advisable to have a detailed floor plan for the unit. And you must talk to the machine supplier regarding the space requirement for the specific machine.
There are several diamond cutting and polishing machines you can find in the market. However, you must procure the right machine according to your specific demand. First of all, determine the size of rough diamonds that you want to cut. Additionally, specify the required quantity output. And accordingly choose the machine. There are several aspects you might consider in the finished diamonds. These are single-side processing, parallel walls, tight kerf widths, unmatched surface finishes, higher yields and minimal weight loss.
Staffing & Marketing
Human resource plays an important role in this industry. And in the startup company, you must hire the skilled and experienced manpower for your company. Additionally, you must conduct training programme regularly to keep your team relevant with the current trends.
Basically, this is a B2B business. Therefore, you must concentrate at the networking. Additionally, chember of commerce membership and relevant trade shows are the right options for creating the brand awareness. Finally, you must go for the export for getting the long term success of your diamond cutting and polishing business.