GEMS AND JEWELLARY

Group Members
Kavita Jaiswal Pramod Patel Saurabh Patki Madhavi Pawar 09 19 23 24

Gems and Jewellery Industry in India

The gems and jewellery industry in India occupies a significant position in the Indian economy. The market encompasses various kinds of jewels including gold, colored gemstones, costume jewelleries, platinum and diamonds. The sector is expected to register a compound annual growth rate (CAGR) of 13 per cent during 2011- 2013, according to a RNCOS report titled, 'Indian Gems and Jewellery Market Forecast to 2013'. Gold covers about 80 per cent of the Indian jewellery market and the rest of the part is covered by the fabricated studded jewellery consisting diamond and gemstone studded jewellery. Apart from that India has also emerged as the largest cutting and polishing industry for diamond in the world. The country's men's jewellery market in the world in 2011 is estimated at approximately Rs 954 crore (US$ 193.9 million) in sales. The journal estimated that by 2015 the gems and jewellery sector will help India earn about US$ 25 billion to US$ 35 billion in form of export revenue.

 A steady sale of jewelleries, especially of gold, has helped the gems and jewellery industry in India flourish at this rapid rate. In addition, India has evolved as a great place for diamond processing, according to the industry body. Gems and Jewellery Industry in India: Industry Structure The jewellery industry in India is estimated at Rs 150,000 crore (US$ 30.49 billion) industry of which only 5 per cent is organised, thus creating opportunity for the foreign players to enter the Indian market and increasingly making the Indian market organised. The global demand for gold in 2011 rose to 4,067.1 tonnes worth an estimated US$ 205.5 billion - the first time that global demand has exceeded US$ 200 billion and the highest tonnage level since 1997, according to a report released by the World Gold Council (WGC). The main driver for this increase was the investment sector where annual demand was 1,640.7 tonne, up by 5 per cent as compared to the record set in 2010 and with a value of US$ 82.9 billion.

Size Large market for Gems & Jewelery with domestic sales of over $10 billion. 4% of the global Gems and Jewelery market . Exports of over $15.5 billion; over 18% of Indias exports. India is the largest consumer of gold jewelery in the world. Accounts for about 20% of world consumption. India is the largest diamond cutting and polishing centerer in the world. 60% value share, 85% volume share and 92% share of the world market by number of pieces. Third largest consumer of polished diamonds after USA and Japan. Structure The Indian Gems & Jewelery industry is highly fragmented with a large number of domestic private sector companies. A large portion of the market is in the unorganized sector . India is gaining prominence as an international sourcing destination for high quality designer jewelery . Walmart, JC Penney etc. procure jewelery from India .

Policy 100% FD is permitted in the Gems & Jewelery sector through the automatic route. SEZs and Gems and Jewelery Parks have been set up to promote investments in the sector.
Opportunity India is one of the largest exporters of gems and jewelery India is the diamond polishing capital of the world. Outlook India is the fastest-growing jewelery market in the world. Branded jewelery likely to be the fastest-growing segment in domestic sales. Expected to grow at 40% p.a. to $2.2 billion by 2010. Exports expected to grow from $15.5 billion in 2005 to over $25 billion by 2010. Potential India has several well recognized strengths which have made it a significant force in the global Gems and Jewelery business. Highly skilled, yet low-cost labor. Established manufacturing excellence in jewelery and diamond polishing. India is the most technologically advanced diamond cutting center in the world. Opportunity to address one of the worlds largest and fastest-growing Gems and Jewelery markets. Opportunity to leverage Indias strengths to address the global market

The Gem and Jewellery Export Promotion Council

Set-up in 1966, the GJEPC has over the years effectively moulded the scattered efforts of individual exporters to make the gem and jewellery sector a powerful engine driving India's export-led growth. This apex body of the gem & jewellery industry has played a significant role in the evolution of the Indian gem and jewellery industry to its present stature. GJEPC is continuously working towards creating a pool of artisans and designers trained to international standards so as to consolidate the Indian jewellery industry and establish it as a prominent global player in the jewellery segment. With strength of 6,500 members' spread all over the country, the Council is primarily involved in introducing the Indian gem & jewellery products to the international market and promotes their exports. To achieve this, the Council provides market information to its members regarding foreign trade inquiries, trade and tariff regulations, rates of import duties, and information about jewellery fairs and exhibitions. The role of GJEPC can be broadly classified under the following categories: Trade Facilitator : The Council undertakes direct promotional activities like organising joint participation in international jewellery shows, sending and hosting trade delegations, and sustained image building exercises through advertisements abroad, publications and audio-visuals.GJEPC also invites countries to explore areas of co-operation in supply of rough diamonds and rough colored stones as well as offers co-operation in jewellery manufacturing. The Council regularly communicates with Indian Embassies, trade bodies and associations in various countries. And finally, GJEPC also organizes seminars, buyerseller meets, symposiums.

Advisory Role : A crucial area of activity of the Council has also been aiding better interaction and understanding between the trade and the government. The Council takes up relevant issues with government and agencies connected with exports and submit documents for consideration and inclusion in the Exim Policy. The Council also grants membership, registration certificates and performs other roles as per the Exim Policy. Nodal Agency for Kimberly Process Certification Scheme : GJEPC works closely with the Government of India and the trade to implement and oversee the Kimberly Process Certification Scheme. To that effect, the Council has been appointed as the Nodal Agency in India under the Kimberly Process Certification Scheme. Training and Research : The Gems & Jewellery Export Promotion Council runs a number of institutes that provide training in all aspects of manufacture and design in Mumbai, Delhi, Surat and Jaipur. These training programs are being conducted to ensure that the Indian industry achieves the highest levels of technical excellence. Varied Interests : The Council also publishes a number of brochures, statistical booklets, trade directories and a bi-monthly magazine - Solitaire International, which is distributed internationally as well as to its members. Finally, the Council has also developed its own promotional audiovisual film - 'India - Your First Choice', which is dubbed in various international languages as well as screened at various trade shows

Government Initiatives(m)
In the New Annual Supplement to Foreign Trade Policy (20042009) announced on April 19, 2007, the Government has extended the following facilities to this sector:

Service Tax on services (related to exports), which are rendered abroad have been exempted. Re-import of Diamonds & Jewelery (either in complete or partial lot) exported on consignment basis have been allowed. In the light of increase in global prices of precious metal, duty free entitlement for consumables for export of rhodium plated silver jewelery has been increased to 3 per cent. 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. Duty free import entitlement of tools, machinery & equipment has been allowed. For metals other than gold, platinum, it will be 2 per cent and for gold and platinum, it will be 1 per cent of FOB value of exports during the previous financial year. Categorization of exporters as One to Five Star Export Houses has been changed to Export Houses and Trading Houses with rationalization and change in export performance parameters.

 In addition, the Government has decided to make gold hallmarking mandatory from January 1, 2008. It has also made the import of polished diamonds completely duty free. This will facilitate the sector towards evolving from being just a manufacturing centerer to becoming a global trading hub for diamonds, gems and jewelery. The committee appointed to study India's National Design Policy is likely to recommend the setting up of four additional National Institutes of Design (NIDs), along the lines of the existing Ahmadabad-based NID, whose curriculum includes, among other disciplines, jewelery design

Major Players in the Jewelery Market

Existing and new foreign players are drawing plans for expansion and launch of their operations in India: De Beers has got permission to survey for diamonds in Jharkhand, Italian luxury silverware manufacturer, Greggio Argento, will set up two exclusive stores in Mumbai and Delhi within the next three months, through a marketing tie-up with Gitanjali Lifestyle a subsidiary of Gitanjali Gems. Swarovski, the global crystal goods manufacturer and marketer, is on an expansion spree in India and hopes to achieve 5 to 10 per cent of the global turnovers from the country in the next ten years. The company plans to set up 30 stores by 2009, from the current 13. Damas India, part of one of the largest jewelery retail outlets in the world, is adding 16 new stores to its present dozen stores in India.

Simultaneously, domestic players are also drawing aggressive plans:

Shrenuj & Company Ltd has acquired 84.6 per cent stake in the US-based jewelery distributor Simon Golub & Sons Inc for US$ 22.7 million. Kerala-based jeweller Malabar Gold will spend US$ 48 million over the next year in order to expand its presence in southern India as well as abroad. Gitanjali Gems Ltd, a Mumbai-based jeweller, has incorporated a whollyowned subsidiary in Dubai, Gitanjali Ventures DMCC, whose main activity is trading in diamonds, precious stones, diamond jewelery and pearls. Also, the Gitanjali Group has announced its foray into the luxury retail market through a new entity Luxury Connexions'. The company will invest US$ 24.5 million over three years to set up luxury malls in eight leading cities across the country. Two new special economic zones (SEZs) for gems and jewelery are to come up at Goregaon and Dhulia, both in Maharashtra. Also, the state-run Minerals and Metals Trading Corp. (MMTC), plans to establish a gems and jewelery special economic zone (SEZ) in partnership with a private company

Budget 2012 highlights

Gold and Platinum costly Customs duty on standard gold bars; gold coins of purity exceeding 99.5% and platinum from 2% to 4% Customs Duty on non-standard gold from 5% to 10% Basic duty on gold ore, concentrate and dore bars for refining has also been double to 2%. Excise duty on refined gold has been increased from 1.5% to 3%

Budget 2012 Effects

Effect: 1. Gold can get costlier by 3-4% as jewellers will pass on customs duty and excise duty on to the consumers. 2. It can also encourage import of gold unenthically hampering. 3. Gold jewellery makers such as Gitanjali Gems and Titan Industries will also be hit due to high costs and as expensive jewellery will deter buyers hurting sales volume. 4. Gold loans providers such as Muthoot Finance and Manappuram Finance Ltd may see slower volume growth after basic customs duty on gold was doubled

Trader Insight: Mr.J D Mistry

Trader Insight
Prominence of Palanpuri Jain Community Surat Main Hub other centres include :Panchratna building,Diamond bourse in BKC Skilled labour at low cost More than 80% diamonds cut ,polished in India Diamond Market slow down after U.S recession and Japan Tsunami GIA certificate Angadiya

Trader Insight
One window clearance system in gujrat SEZ big help to traders Govt Interference less Lots of Black Money Government support for infrastructure Business based on trust, reputation Chinese Delegation

Thank You