Gems and Jewellery made-in-India gaining back some lost gleam

The exports of Gem and jewellery seem to be back on track. Gold jewellery exports in May recorded a growth of 158 per cent at Rs 3,911 crore against Rs 1,513 crore in April.

Cut and polished diamond, exports increased by 18 per cent to Rs 4,528.76 crore (Rs 3,847 crore) in May.

Total exports including coloured gemstones and rough diamonds increased by 55 per cent at Rs 8,887 crore (Rs 5,749 crore).

India is rising as the world’s largest trading centre for gold, aiming US$ 16 billion by 2010. The industry has a rich resource pool of skilled manpower for designing and producing high volumes of fine jewellery at low costs.

Diamonds made-in-India

Only few Indians are aware of the fact that India has the largest diamond cutting and polishing centre in the world. Simply put, 9 of the 10 diamonds sold world over is cut and polished in India. In 2007-08, India exported cut and polished diamonds worth US$14.18 billion in 2007-08.

Booming Retail Sector

The Indian gems and jewellery sector so far, was an unorganized sector. However, with new age customer becoming more brand conscious and quality conscious as well, the demand for branded jewellery is gaining fresh impetus. As per Mckinsey report, the demand for branded jewellery will be worth US$ 2.2 billion by 2010.

Also, the government has permitted 51 percent FDI in single brand retail outlets, alluring both global and local players to this sector.

As per the report published by Technopak Advisors on the Changing Retail Landscape in India, the jewellery and watches market is worth US$ 13.70 billion. And it is estimated to register a 12 per cent growth by 2012, reaching US$ 23.60 billion.

The World Gold Council recently informed that the size of India's gold coin market is worth US$ 2.11 billion.

In an attempt, to enhance the demand during recession, jewelers are introducing novel designs in light weight jewellery.

India Gems and Jewellery Exports

As per the figures released by the Gem & Jewellery Export Promotion Council (GJEPC), the exports of gems and jewellery, registered a growth of 1.45 per cent during 2008-09, driven by gold jewellery exports. This includes medallions and ornaments. In 2007-08, the country exported gems and jewellery worth US$ 20.8 billion.

Gems and jewellery amounting to US$ 17.79 billion was exported during April 2008 to February 2009. Notably, rough diamond exports stood at US$ 712.09 million, an increase of 43 per cent over the corresponding period previous year.

The United Arab Emirates (UAE) was the largest importer of gems and jewellery made-in-India in 2008-09; this was followed by Hong Kong and the US. Of the India’s total merchandise exports, the gems and jewellery made-in-indiaaccounted for 13 per cent.

The export industry mainly consists of small-to-large units set up in various special economic zones (SEZs) delivering diamond-studded jewellery.

Government schemes for export promotion

The Indian government has introduced favourable foreign trade policies to boost the booming gems and jewellery industry of India

* Foreign direct investment (FDI) up to 100% is allowed in gems and jewellery through the automatic route

* The government has reduced import duty on platinum and has exempted coloured precious gems stones from customs duty.

* Import of Rough, semi-precious stones are duty-free.

* Import of Metals other than gold and platinum are duty-free up to 2 per cent of freight on board (f.o.b) value of exports.

* Rejected jewellery imported is duty-free up to 2 per cent of f.o.b value of exports.

* Establishing of SEZs and gems and jewellery parks to boost investment in the sector.

* In May 2007, the import duty on polished diamonds, abolished.

* The government has raised the limit value of jewellery parcels for export through foreign post office (including via speed post) from US$ 50,000 to US$ 75,000

• The export of coloured gemstones on a batch basis has been permitted.