INDUSTRY STUDY REPORT ON

“Gems and Jewellery

PROGRESS REPORT – II

PREPARED BY
NEVIL MANGROLIA
KEVIN SHELADIYA

(BBA SEMESTER – III)

ENROLLMENT NUMBER
20FOMBA11524
20FOMBA11540

FOR THE SUBMISSION OF

CIE – II

GUIDED BY
PROF. DHARA BHALODIA

SUBMITTED TO
FACULTY OF MANAGEMENT
RK UNIVERSITY
RAJKOT

MONTH & YEAR

09/2021
 Preface
This report for the year ended 31 March 2009 has been
prepared for submission to the President of India under
Article 151(1) of the Constitution of India. Audit of
Revenue Receipts – Indirect Taxes of the Union
Government is conducted under the Section 16 of the
Comptroller and Auditor General of India (Duties, Powers
and Conditions of Service) Act, 1971. The observations
included in this report have been selected from the
findings of test audit, during the year 2008-09, while
conducting performance audit of custom duties from
‘Natural or cultured pearls, precious or semi-precious
stones, precious metals, metals clad with precious metal
and articles thereof, imitation jewellery, coin

Acknowledgement
Preparing a project of this nature is an arduous task and I
was fortunate enough to get support from a large
number of persons. Iwish to express my deep sense of
gratitude to all those who generously helped in
successful completion of this report by sharing their
invaluable time and knowledge. It is my proud and
previledge to express my deep regards to Respected Mrs.
Anjali Namdeo Thakur FeranSingh Art and Commerce
Collage Shahpur for 4 allowing me to undertake this
project. I feel extremely exhilarated to have completed
this project under the able and inspiring guidance of Mrs.
Anjali Namdeo He rendered me all possible help and
guidence while reviewing the manuscript in finalising the
report. I also extend my deep regards to my teachers,
family members, friends and all those whose
encouragement has infused courage in me to complete
the work successfully.

TABLE OF CONTENTS
 SR. NO. PARTICULARS PAGE NO.

1 PESTLE Analysis 5

2 Five Force Model 8

    Future Growth opportunities and threats to the

3 Industry 10

PESTLE ANALYSIS OF GEMS AND JEWELRY

Introduction
Being considered as crucial part of various cultures, the precious gems and jewelry items are bought as
status symbol. The Gems and jewelry industry is one of the fastest growing sectors in international
markets such as India, Bangladesh and many others. This substantial growth has pressurized companies
to invest heavily on marketing and publicity of jewelry items. Despite of being an unorganized sector,
the gem industry consists of companies whose business is global covering all the jewelry manufacturers
and traders worldwide. India being a major player in this industry comprises of skilled and trained
workers who work under liberalized government policies. The sector is facing problems in achieving
economies of scale for its fragmented structure. The major threat is coming from China which is
displacing the Indian jewelry slowly.

Although a part of customers love traditional gold jewelry, the diamond and other gems jewelry is also
becoming a symbol of fashion statement. The fashion trend is evolving and allowing the users to prefer
to wear traditional yet modern jewelry. Thus industry is facing subsequent changes from changing
consumer behaviors and industry trends. The changing trends require the gem industry to design new
business model decisions and strategies after analyzing the external factors. Following is a detailed
pestle analysis of gem and jewelry industry.

Political Factors
The political factors are very important since they may restrict the business operations of any company
or industry. The political condition in countries as UK and US are quite stable and the jewelry businesses
can easily undertake business at international levels. However the taxation policies on precious metals
by government will discourage the buyers.

Other political factor is excise duty which can be increased or decreased by government on the cut and
polished gems. The industry has to take in review the marketing and control orders of the Council
established to provide guidance regarding trade tariffs, import duties and other trade regulations. Other
factors include foreign direct investment approvals by the government in the industry. The industry
operations are also influenced by the government policies and taxation regarding the export and import
of diamonds.

Economic Factors
The most common economic factor which affects the consumer purchase is his per capita consumption
power. As it grows the customers will purchase more jewelry which can be seen in previous years in
India. The improvement in living standards and increase in national income of population has resulted in
higher investment in gem and jewelry purchasing. The custom duties reduction has also brought growth
to the diamond sector.New organized players are coming in the market with increasing penetration that
will provide variety in terms of products and designs. The gold import restrictions are being relaxed
which will give added benefit to industry.

Social Factors
People now consider diamond and gold jewelry as luxury fashion product and love to invest in it. The
retail organizations have introduced this idea which has been embraced by many customers. With
increasing prices of gold over the years, the people now prefer to invest in diamond and gems instead.
Since diamond has become a status symbol so the investment and purchase of diamond has increased
with improved standard of living. The consumer preferences change according to trend.

Low cost gold loans are made available to consumers at lower levels has added to the importance of
jewelry. Many financial schemes have been introduced which in turn will drive growth for jewelers over
short to medium term. All these social factors have given new directions to the gem and jewelry industry
when it comes to its business expansion.

Technological Factors
Indian gem and jewelry industry has highly skilled labor for cutting and polishing diamond and gold
however need of high end equipment has risen for moving up in value chain. The introduction of new
machinery and tools has enabled the jewelry brands to rise above competition. The finesse and finish of
machine cut products is unmatchable.

The industry needs to adopt the new technology solutions which are available for inventory
management, supply chain and production control. Quality production of gems and diamonds can only
be ensured through technology enabled environment in the industry.

Legal factors
Trade facilitator plays an important role in promotional activities of Diamond display shows, organizing
trade workshops and taking care of trade delegations. It works to make interaction better and envelops
more understanding between governments. The Gems council has also established institutes for
providing training and research in various aspects of gem industry.

Boosting the exports for the gems and jewelry industry is also important. Various activities are organized
under the consent of government. The participation of legal members and exporters will display items
on various stalls and exhibition. This will help to boost sales and generate maximum revenue in
minimum time.

Environmental factors
The jewelry industry is addressing its social and ethical responsibilities to the people and countries
regarding the mining and selling of products. The industry has tackled significant issues include health,
safety and environmental issues. The companies are working towards restricting the illegal exploitation
of precious commodities. The environmental factors vary according to the location of the industry. The
processing activities and the production methods used for cutting and polishing gem stone will surely
leave an impact on gemstone.

PORTER’S FIVE FORCE ANALYSIS

Rivalry Among Exiting Competitors
Two types of rivalry. (1) Inside India & (2) Outside India. Ge Large presence of unorganized sector. 0.2
Million Gold jewelers and over 8,000 Diamond jewelers • International rivals Such as, China • Threat
from producing nation like S.A. & Russia.

Bargaining Power of Suppliers

In jewelery industry the suppliers are S.A. , UAE, Australia, US, Russia, etc. Ew Few Alternatives of
cutting & polishing Skilled labor • Bargaining power of India is enhanced because India is largest
consumer of gold jewelery
Bargaining Power of Buyers
Divided into two types 1. Domestic buyers & 2. Foreign buyers • As investment (Demand increase) •
Bargaining power of Indian exporter is high because Majority of the world's largest diamond production
is cut and polished in India.

Threat of Substitutes
Substitutes are Real assets, Stock market, & Bank deposits & mutual fund investment. • Second
preferred investment behind bank deposits • Status and standard of living increase so demand is
increasing at high rate

Future Growth opportunities and threats to the Industry