'File 9/2 Pearling' [‎70r] (139/312)

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Commonwealth Relations Office,
Downing Street,
London S.W.l.
26th November, 1947.
My dear Symon,
As you know pearls are on the list of goods whose import
into India the Government of India will not at present license
at all. The Sheikh of Bahrain, who has made urgent represent
ations to the Political Resident A senior ranking political representative (equivalent to a Consul General) from the diplomatic corps of the Government of India or one of its subordinate provincial governments, in charge of a Political Residency. in the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. , says
that at present Bombay is the only market where pearls can be
properly processed, graded etc., and that formany classes of
pearls there is no market outside India. The trade figures
suggest that the great bulk of Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. pearls go to India
and that formerly they were mostly retained there. The effect
on the economy of the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. of the Government of Indian
embargo therefore needs no emphasis. Indian retained imports
of Gulf pearls were running fairly steadily at something bet
ween six and seven lakhs One lakh is equal to one hundred thousand rupees of rupees Indian silver coin also widely used in the Persian Gulf. before the war and rose grea
tly in value in 1943/44.
2. Clearly the Government of India are, on general grounds,
right to ban the import of luxuries of this nature at the
present time. But since,apart from our own position and inter-
estwe are responsible for the interests of the Government of
India in the Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. , we feel bound at least to bring
the representation of the Sheikh to the notice of the Govern*
ment of India and we should be glad if this could be done.
We must also consider ourselves whether any remedy can be
found for the situation as it affects the Gulf.
3. One of the possibilities which we have considered is
diverting tPade to this country. The Board of Trade at
present permit the import of pearls under a scheme whereby
80% by value are re-exported: but from enquiries made of
the trade it seems that British jewellers are not at present
interested, and we have not at this stage pursued the matter
further. Our reason for this is that, even if it were possible
to obtain some short term advantage by importing and re
exporting these jtear^s from the United Kingdom, it would be
bad policy to work towards such a drastic surgical operation
as would be involved, when the trade has gone to Bombay in the
past. The Board of Trade have also asked their men in Canada
U.S.A., Portugal, Uruguay, Iraq, Syria and Persia to report
on the prospects for Persian Gulf The historical term used to describe the body of water between the Arabian Peninsula and Iran. pearls in those countries.
The results are not yet in. Whatever those results may be,
we still feel that some attempt should be made to find the
solution of the problem within the Indian orbit. We cannot pres
the Indians freely to license the import of pearls (incidentally
it was not only from the Gulf that India imported pearls in the
past), but we wonder whether they might not be prepared to con
sider doing something on the lines of the Board of Traded sch
eme here - i.e. permitting the import of pearls at least to
some extent, subject to re-export of a high percentage by value
and trying to build up a re-export trade connection with hard
currency countries. There appears to have been no such trade
on any scale before the war, but the enclosed extract from the
records of the former Finance Department of the Government of
India which was given to the Political Resident A senior ranking political representative (equivalent to a Consul General) from the diplomatic corps of the Government of India or one of its subordinate provincial governments, in charge of a Political Residency. during visit
to Delhi in 1946 shows that Indian pearl trade with the U.S.A.
in 1944 was not inconsiderable. If such a trade could be
established and expanded it would be to the advantage of all
concerned - the Gulf, the Government of India (for both
Political and financial reasons) and ourselves (for the sameW?
reasons)-