INDUSTRY STUDY REPORT ON

“GEMS AND JEWELEERY”

FINAL REPORT

PREPARED BY NEVIL
MANGROLIA KEVIN
SHELADIYA

(BBA SEMESTER-III)

ENROLLMENT NUMBER
20FOMBA11524
20FOMBA11540

FOR THE SUBMISSION OF SEE

GUIDED BY
PROF. DHARA BHALODIYA

SUBMITTED TO FACULTY OF
MANAGEMENT

RK UNIVERSITY RAJKOT
OCTOBER/2021
 TABLE OF CONTENT

SR. PARTICULARS PAGE NO.

NO.
1 Preface 3
2 Acknowledgement 4
3 Introduction 5
4 Growth and Drives 6
5 Contibution to Indian Economy 7
6 Market Size And Investment 8
7 Government Initiative To Boost The Industry 9
8 Major Players In The Industries 10
9 Pestle Analysis of Gems and Jewellry 11
10 Porter’s Five Force Analysis 14
11 Future Growth Opportunities 15
12 17
Key Issues And Current Trends In The
Concerned Industry
13 Impact of Budget On Industry 19
14 Learning From The Report 20
15 Conclusion 20

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 PREFACE

This report is prepared to fulfil the requirement of the BBA program of R.K. University on research report of gems
and jewellery. The objective of the program was to familiarize the student with the implementation of the knowledge
she/he earned on the campus. The practical knowledge is far different from the bookish knowledge that a
student achieves in an institution.

In the further section mentioned about information, product mix of the company and recent problems faced by the
company due to pandemic.. gems and jewellery.

The present is not free of limitations. There might have problems regarding lack of limitation in some aspects and also
some minor mistakes such as typing mistakes. These few drawbacks have occurred merely due to time limitation and
lack of secondary sources of information. Though I have tried my best to keep the report free from errors, I apologize
if any error is found which was not deliberately made. If the report can help any person in providing information, I
will feel that the purpose of the report has been fulfilled.

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 Acknowledgement

The completion of any task is the reward to not only persons actively involved in accomplishing it, but
also to the people involved in inspiring, guiding and helping those people. We take the opportunity here
to thank all those who are helping us in this project, without which this indeed, would have been, a
mammoth task.
We would like to express our gratitude towards RK university school of management and Dr. Chintan
Rajani campus head city campus for providing this opportunity. Yet, this project wouldn’t have been
possible without the continues guidance and support of our Project guide Prof. Dhara Bhalodia
Lastly, we would like to express our gratitude towards our parents, friends and family.

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 INTRODUCTION

As of January 2021, India’s gold and diamond trade contributed ~7.5% to India’s Gross Domestic Product
(GDP) and 14% to India’s total merchandise exports. The gem and jewellery sector is likely to employ ~8.23
million persons by 2022, from ~5 million in 2020.
Based on its potential for growth and value addition, the Government declared gems and jewellery sector as
a focus area for export promotion. The Government has undertaken various measures recently to promote
investment and upgrade technology and skills to promote ‘Brand India’ in the international market.
The Government has permitted 100% FDI in the sector under the automatic route, wherein the
foreign investor or the Indian company do not require any prior approval from the Reserve Bank or
Government of India.

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 GROWTH AND DRIVERS

The Global Gems and Jewelry Market report covers drivers, restraints, challenges, and threats to understand
the overall scope of the market in a detailed concise manner. The report inculcates an influential view on the
volume and market size.

The research report on the Global “Gems and Jewelry Market”2021 elaborates the key market opportunities,
CAGR, yearly growth till 2024 to review the market. The market study is segmented by key regions that are
accelerating the marketization to help the readers to understand the qualitative and quantitative aspects of the
global Gems and Jewelry market. The study is a perfect amalgamation of qualitative and
quantitative information covering the competition landscape, company profiles, financials, technological
developments, and investments. Various parameters have been collected through validating research
techniques with the help of primary data and secondary sources while estimating the market size

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 CONTIBUTION TO INDIAN ECONOMY

India’s gems and jewellery export sector—which is one of the largest in the world—contributed ~27% to the
global jewellery consumption in 2019. Market size of the global gems and jewellery sector is likely
to expand to US$ 103.06 billion between 2019 and 2023. India’s gems and jewellery exports are expected to
reach US$ 100 billion by 2025.
In FY21*, exports of gems & jewellery stood at US$ 21.89 billion. In February 2021, exports of gems &
jewellery stood at US$ 2.64 billion.
In September 2020, the US was the largest country (at 44%) to import gems and jewellery (US$
938.54 million) from India, followed by Hong Kong (~33%) and the UAE (~13%).
In FY21*, cut and polished diamonds accounted for ~65% of the total gems and jewellery exports,
with India exporting 75% of the world’s polished diamonds.
According to Gem and Jewellery Export Promotion Council, between April 2020 and December 2020, gold
bars accounted for ~6.8% (US$ 678.77 million) and gold jewellery at ~1.8% (US$ 181.49 million) of the
total gems and jewellery imports in India. As per the World Gold Council (WGC), India’s gold
demand stood at 446.4 tonnes in 2020.
The Government has permitted 100% FDI in the sector under the automatic route, wherein the
foreign investor or the Indian company do not require any prior approval from the Reserve Bank or
Government of India. The Government has made hallmarking mandatory for gold jewellery and artefacts and
a period of one year is provided for its implementation.
As per Union Budget 2021, the Gem and Jewellery Export Promotion Council has proposed a reduction in
import duty on cut and polished diamonds to 2.5%, from the existing 7.5%, in order to double exports of
gems & jewellery to US$ 70 billion by 2025.
Cumulative FDI inflows in diamond and gold ornaments in India stood at US$ 1,190.47 million between
April 2000 and December 2020 according to Department for Promotion of Industry and Internal
Trade (DPIIT).
*between April 2020 and February 2021

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 MARKET SIZE AND INVESTMENT

In FY21, exports of gems & jewellery stood at US$ 25.30 billion. In March 2021, exports of gems
& jewellery stood at US$ 3.42 billion.
In April 2021, India exported gems & jewellery worth US$ 3.37 billion compared with US$ 36.11 million in
April 2020.
In September 2020, the US was the largest country (at 44%) to import gems and jewellery (US$
938.54 million) from India, followed by Hong Kong (~33%) and the UAE (~13%).
In FY21, imports of gems & jewellery stood at US$ 16.49 billion. Imports of gold jewellery recorded US$
262.25 million from April 2020 to February 2021.

Cumulative FDI inflows in diamond and gold ornaments in India stood at US$ 1,190.47 million between
April 2000 and December 2020 according to Department for Promotion of Industry and Internal
Trade (DPIIT).

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 GOVERNMENT INITIATIVE TO BOOST THE INDUSTRY

 The government has reduced import duty for Gold & Silver (from 12.5% to 7.5%) and
Platinum (from 12.5% to 10%) to bring down the prices of precious metals in the local market.
 Indian Government made hallmarking mandatory for Gold Jewellery and Artefacts. A period of one
year is provided for implementation i.e. till January 2021.
o In December 2020, All India Gem and Jewellery Domestic Council (GJC) welcomed the
decision to make hallmarking compulsory from June 2021 in a phased manner; urged the
government to examine the key concerns of the industry for smooth implementation of the initiative.
 In December 2020, the Finance Ministry notified that the amendment under Prevention of
Money Laundering Act (PMLA), notifying dealers in precious metals and stones, will maintain
records of cash transactions worth Rs. 10 lakh (US$ 13.61 thousand) or more cumulatively
with a single customer.

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 MAJOR PLAYERS IN THE INDUSTRIES

Hong Kong accounted for the highest value in the export of precious gems and jewelry from India in fiscal
year 2020 at over 675 billion Indian rupees. United States and United Arab Emirates ranked second and third
respectively. Pearls, precious and semi-precious stones made up nearly eight percent of exports from India,
while precious metal jewellery contributed nearly four percent in financial year 2019.

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 PESTLE ANALYSIS OF GEMS AND JEWELRY

Introduction
The macro environment includes all relevant focus outside a company’s boundaries relevant in the sense that
they are important enough to have brought on the decision. An industry ultimately makes about its business
model and strategy. Why many forces in the micro environment are beyond a company’s sphere of?
influence Company’s strategy may be needed for answer it. Micro environment includes all general force that
do not directly touch on the short run activities of the organization but that can and often does, in
dulgenceits also ran decisions.
The value of this market was over three trillion rupees in 2016 and estimated to nearly double by
2021. Gold, silver, and gems including diamonds are used across the country to create different types of
jewellery.

Political Factors
The Government of India (GoI) has been working to develop the Diamond industry in India through several
initiatives but under the purview of Diamond industry. The main political factors are as follows. Excise duty:
In the budget of year 2008-09 government reduce excise duty from 10% to 5% on cut and polished diamond
units.

Marketing and control orders: Import of rough diamonds controlled by the Jewellry export
Promotion Councils .The Council provides market information to its members regarding foreign trade
inquiries, trade and tariff regulations, rates of import duties, and information about Diamond fairs and
exhibitions.

FDI approval: India is now the third most favored destination for Foreign Direct Investment (FDI),
Government of India may permits 49% of FDI in the Diamond industry. FDI of $ 2 billion are invested in
terms of working capital in the industry.

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Government policies and taxation: From January 1, 2008. It has made the import of polished
diamonds completely duty free. To reduce the transaction cost for the diamond sector, testing facility at
International Diamond Laboratory (IDL), Dubai, has been incorporated in the list of laboratory/certifying
agencies.

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.

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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.

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 PORTER’S FIVE FORCE ANALYSIS

Threat of Substitutes
Gems and jewellery do not have any substitute products that can be used for the same purpose or having the
same value.

Bargaining Power of Suppliers

Bargaining power of suppliers is low as the value of orders is quite high and the rates are usually fixed.

Competitive Rivalry
Competitive rivalry in this sector is very high as there are a large number of players with similar products
and the customers do not have a switching cost

Bargaining Power of Buyers

Buyers do not have a bargaining power as the price of gold is market regulated and therefore it is fixed. Also,
prices of other gems and stones is also fixed by the sellers and is usually similar across sellers.

Threat of New Entrants

Threat of new entrants is low as it is not very difficult to set up a jewellery business; there aren’t
any restrictions over entrants as such.

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FUTURE GROWTH OPPORTUNITIES AND
THREATS TO THE INDUSTRY

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• Covid-19 has changed the way we look at things. Not only has the global pandemic affected our lives in
unimaginable ways, but also impacted our habits - from work to shopping, every avenue possible has
taken a blow.

• While the world is weathering an economic crisis, with nations building respective strategies to sail
through, the jewellery industry has also slowed down. But, if there has been an industry that has remained
fluidic for many decades, it has been the gem and jewellery industry.

• Famines, floods and other natural disasters haven’t really been able to affect it greatly, as the demand for
jewellery has always existed and the artisans and jewellers have always pushed themselves harder to meet
the demand.

• So, what lies ahead for the industry that has survived all odds and proved to be the phoenix rising from the
ashes? We got in touch with the industry biggies to know what the future holds for the jewellery industry
and here’s what they had to say.

• According to Anand Shah of Anand Shah Jewels, the future of jewellery in India definitely looks
promising as it has come a long way. “From considering gold as a mere investment to holding
dignity in owning precious jewels, our country has evolved to a great extent. With changing
times, we have witnessed different trends in the jewellery industry, only to desire for more. Be it the
special occasions like weddings or auspicious days like ‘Akshay Tritiya’ etc, jewellery makes it a
complete affair,” says Shah, who feels the trend will continue for eternity.

• Like any other industry, business of the jewellery industry has also got affected by the unexpected
pandemic but industry insiders feel this is a temporary phase which will end soon.

• “The gems and jewellery industry has been impacted due to the pandemic, but we are seeing some green
shoots of recovery post the lockdown.

• While there is still uncertainty, we believe there will be both emotional and rational intent to purchase
Gold as it is considered to be a safe haven for investment

• It is beyond an adornment metal, it is a symbol of security,“ feels Ranjani Krishnaswamy, General

Manager, Marketing, Jewellery Division, Titan Company Limited
.
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.
KEY ISSUES AND CURRENT TRENDS IN THE
CONCERNED INDUSTRY

The gems and jewellery industry plays a vital role in the Indian economy. It contributes about 6-7% of the
GDP and employees over 2.5 million workers, according to FICCI. The Government of India
recently declared the gems and jewellery industry as a focal point for exports. India is considered a global
hub for low costs and inexpensive skilled labor. Government policies support the polishing and gem cutting
industry, making it the world's largest.

During the pandemic and after, the Government has continued to support the industry. The gold
prices soared during the lockdown period and saw a rise in sales. Gold picked up momentum in the festive
season and continued to show promise. The gradual growth in the gold market is testimony that the
industry is making a steady recovery. Experts have predicted that the industry will soon shine like a
star and will sparkle like a precious diamond in the nearest future.

Marriage and Festivals Season

Festivals and weddings in India are seasons when the industry recovers from any slowdown. We expect that
the oncoming festivals and the consequent wedding season will rush the growth positively. According to the
changing trend, light-weight classic designs are preferred for heavy jewellery. The wave of new fashion is
going to be the trend for the coming years. It has increased the demand for solitaire diamonds and svelte gold
pieces of jewellery. There will be a new bridal trend where light-weight jewellery pieces and elegant gold
jewellery will rule the fashion accessories industry.

Simplicity is Key
As the fashion accessories industry changes the trend, the preferred designs will also be different.
The jewellery that is in demand is simple and chic pieces. People want to look sophisticated without
heavy jewellery. They want to be posh and, that kind of style only comes with conservative, classy designs.
Many prefer to shop within the price budget of 5-25 thousand per piece.

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Digital is Responsible
Light jewelLery has become popular over the past few years. It is because of the rise in digital shopping and
social media. A maximum number of people shop online, making jewellery shopping convenient.
Heavy jewellery pieces are not easy to shop online because it requires the consumer to visit a shop to see the
work for themselves. Shopping for heavy-jewelry is an appreciation of art - the craftsmanship of the design,
the authenticity of the gemstones, and the quality of gold bind the glorious piece. It is also a notable
investment compared to light-weight jewellery.

Customer Service
Many commercial and local jewellers are training their staff members in sales and customer services. Staff
members are taught to charm the consumers and sell a jewellery piece in a skilled manner. The consumers'
shopping experience is also now considered in the entire shopping process. There is stress on the comfort and
uniqueness of the consumers' shopping experience. Because of the digital era, customer service is taken to a
heightened level. The shopping experience is evolved to delight the consumer after buying by offering
various facilities. Jewellery care tips and home deliveries are some of how stores are keeping their customers
satisfied.

Bounce Back in Exports

The export business of gems and jewellery in India brings in the most foreign exchange. There is a 100%
Foreign Direct Investment (FDI) allowed by the Government. It is encouraging that the borders have
gradually begun to open for business, and the export industry is also making a comeback firmly.

We are optimistic that the coming years will be vital in making economic growth in India stable. The gem
and jewellery industry will bounce back and stay bright for the future.

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 IMAPACT OF BUDGET ON INDUSTRY

•India’s Gem & Jewellery Export Promotion Council (GJEPC) has welcomed the
country’s budget due to its reduction of the customs duty on raw materials like gold,
silver and platinum to boost jewellery exports.

•Finance Minister Nirmala Sitharaman announced measures to boost gem and jewellery
exports by cutting the import duty on precious metals such as gold, silver and platinum.

•Here are key features of the budget:

•The import duty on gold and silver has been reduced from 12.5% to 7.5%
•The import duty on Platinum, Palladium has been reduced from 12.5% to 10% The
import duty on Silver Dore Bar has been cut from 11% to 6.1%
•The import duty on Gold/Silver Findings has been cut from 20% to 10%
•The import duty on spent catalyst or ash containing precious metals has been cut from
11.85% to 9.2%
•Colin Shah, Chairman, GJEPC, said, “We sincerely thank the Hon’ble Prime Minister
and Hon’ble Finance Minister for this bold and pragmatic growth-oriented budget.

•“The reduction in import duty from 12.5 per cent to 7.5 per cent will help
(India’s) gem and jewellery exports to become globally competitive.

•“The reduction in the duty on raw materials would give a much-needed boost to the
sector and help it to move to the next level.

•“In fact, high duty on precious metal had made our exports uncompetitive
leading to a large Indian diaspora/NRI, moving to Dubai, Hong Kong or other centres
to buy jewellery which was largely impacting the employment as well as the business in
India.

•“Along with this, the decrease of import duty on jewellery findings to 10% will
help the jewellery manufacturer exporters in a big way. ”

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Mr Shah added, “Another relief for the industry was the clarification on the Equalisation Levy. What we
understand from the budget is that the Online Equalisation Levy of 2% is now not applicable on
B2B purchases from international diamond auctions.

“This will help our manufacturers of diamonds to buy directly from miners.”GJEP

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 LEARNING FROM THE REPORT

I have learned that how the political, economic, social, technological, environmental and legal
aspects of the gems and jewellery.

•Different categories import exports strategy of the gems and jewellery.

•Increase different services from one country to another.

•Clarification opportunities towards the gems and jewellery.

•Finacial opportunites that is given to different analysis over here

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 CONCLUSION

It can be logically concluded that future of Indian gems and

jewellery industry is quite promising, as more and more buyers across the world are turning to
India as their referred
source of the quality for gems and jewellery products. However, gems and jewellery sector is
facing various
problems for
its survival from machine-made goods and efforts must be
made for revival and survival of traditional gems and jewellery goods. And, there are challenges
ahead, the skilled man
power and technology to create and produce designs for the international markets is the main
challenge among others.