Gems and Jewellery Industry in India
Gems and Jewellery Industry in India
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. Jaipur,
a land with a vast cultural heritage and a spirited lifestyle, is
also a very important city in the India gems and jewelry industry.
The Jewelry Stores industry, which sells jewelry, timepieces and
sterling and plated silverware, is composed of traditional
brick-and-mortar shops and does not include internet, mail-order or
direct-sale retailers. India is also home to around 450,000
goldsmiths, 100,000 gold jewellers along with 6,000 diamond
processing players and 8,000 diamond jewellers.
It is estimated that Indian households own nearly 22,500 tonnes of
gold and has a value of nearly $1 trillion.
Kalyan Jewellers Managing Director TS Kalyanmaran is the richest jeweler in the country. Kalyanarman opened
its first jewelery store Thrissur in Kerala in 1993. Now the
company has a total of 102 showrooms in the country and
abroad.
(Net worth – about 8,407 crores)
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.
It is estimated that Indian households own nearly 22,500 tonnes of
gold and has a value of nearly $1 trillion. Gold rates in Kerala at
the moment are the cheapest in terms of 22 karats and 24 karats. In
cities of Karnataka too gold is cheaper, as compared to Mumbai or
Delhi. For example, the 22 karats gold rates in Bangalore is much
cheaper than that offered in the north.
Jaisalmer- It is called the “Golden City” because the yellow golden
sand gives a golden shadow to the city and its
neighboring areas. The town also stands on a fold of yellowish
sandstone, crowned by a fort, picturing the town “Yellow” or
“Golden”.
From a continental perspective, European countries bought the
highest dollar amount of imported gold during 2020 with purchases
valued at $202 billion or 53.9% of the global total. China has the
largest jewelry and watch market followed by the United States,
Japan and India. The U.S. jewelry market was expected to increase
from about 42 billion U.S. dollars in 2020 to over 60 billion
dollars by 2025.
In FY21, exports of gems & jewellery stood at US$ 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. In
April 2021, India imported gems & jewellery worth US$ 2.19
billion compared with US$ 2.27 billion in April 2020.
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).
In February 2021, Reliance expanded its e-commerce arm, JioMart, to
jewellery with silver coins of 5gm and10 gm, and gold coins of 1gm,
5gm and 10gm. Reliance's in-house jewellery brand, Reliance Jewels,
which has ~93 flagship showrooms and 110 shop-in-shops in 105 cities
in the country, will fulfil the orders for the new segment. In
November 2020, Platinum Guild International (PGI) launched their new
'Men of Platinum’ collection for men in leading retail stores across
India.
Jewellery players in India are re-evaluating the brick-and-mortar
business model and planning to implement omni-channel approach with
focus on digital strategy to boost sales.
According to the ‘Online Gold Market in India’ report by The World
Gold Council, the online gold market in India, with relatively
nascent at 1-2% (as of 2020), is witnessing a strong push from both
digital players who view this market as an opportunity and large
jewellers who view this market as a required addition to their
brick-and-mortar model. Maximum development was driven by MSEs in
gems & jewellery and textiles. In November 2020, adoption of
digital distribution platforms among manufacturers of gems and
jewellery, manufacturing mostly non-precious, stone-studded
jewellery, imitation jewellery and luxury fashion jewellery, more
than quadrupled to 55% from 13% before the pandemic. The segment's
micro enterprises recorded the highest boost of 41%, from the
previous 13%.
The government has reduced import duty for Gold & Silver (from
12.5% to 7.5%) and Platinum & Pallidum (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. 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
or more cumulatively with a single customer.
In the coming years, growth in gems and jewellery sector would largely be contributed by the development of large retailers/brands. Established brands are guiding the organised market and are opening opportunities to grow. Increasing penetration of organised players provides variety in terms of products and designs. Online sales are expected to account for 1–2% of the fine jewellery segment by 2021–22. Also, the relaxation of restrictions of gold import is likely to provide a fillip to the industry. The improvement in availability along with the reintroduction of low-cost gold metal loans and likely stabilisation of gold prices at lower levels is expected to drive volume growth for jewellers over short to medium term. The demand for jewellery is expected to be significantly supported by the recent positive developments in the industry.
If you like the information, so tell us in comment section and
follow the page so that you can get the information of the posts
first.
Comments