8/11/2015

GemsandJewelleryIndustryinIndia,Indian,Diamond,Gold,Sector

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GemsandJewelleryIndustryinIndia
Latestupdate:July,2015

GEMS AND JEWELLERY

EXPLOREOTHERINDUSTRIES

GEMSANDJEWELLERY

IndiangemandJewellery
industrycontributedUS$
39.9billionintermsof
foreignexchangeearnings
inFY201415.

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LastUpdated:August07,2015
Govttosoonnotifyspecialzonefordiamond
miningcompanies
USrestoresconcessionaldutyprogramto
Indianexporterstill2017
RajeshExportsacquiresEuropeangoldrefiner
Valcambifor$400million
Demandforgoldrises15%inJanuaryMarch
quarter
Jewelleryexportmighthit4yearhighinFY16

GETNEWSALERTS

Indiahasdonewonderswith
respecttopolishing.TheIndiancut
diamondshavebecomeworldclass
now
TehmaspPrinter
MD,InternationalGemologicalInstitute
India

LastUpdated:July,2015

Introduction
TheGemsandjewelrysectorinIndiaplaysasignificantroleintheIndianeconomy,contributingaround67percent
ofthecountrysGDP.Oneofthefastestgrowingsectors,itisextremelyexportorientedandlabourintensive.The
governmentofIndiahasdeclaredthesectorasafocusareaforexportpromotionbasedonitspotentialforgrowth
andvalueaddition.Thegovernmenthasrecentlyundertakenvariousmeasurestopromoteinvestmentsandto
upgradetechnologyandskillstopromotebrandIndiaintheinternationalmarket.
ThedomesticgemsandjewelleryindustryhadamarketsizeofRs251,000crore(US$40.45billion)in2013,andhas
thepotentialtogrowtoRs500,000530,000crore(US$80.5985.43billion)by2018,accordingtoastudybya
leadingindustrybody.Thestudyalsoprojectedthatthecountry'sgemsandjewellerymarketcoulddoubleinthenext
fiveyears.Thegrowthwillbedrivenbyahealthybusinessenvironmentandthegovernment'sinvestorfriendly
policies.Indiaisdeemedtobethehuboftheglobaljewellerymarketbecauseofitslowcostsandavailabilityofhigh
skilledlabour.
Indiaistheworldslargestcuttingandpolishingcentrefordiamonds,withthecuttingandpolishingindustrybeingwell
supportedbygovernmentpolicies.Moreover,Indiaexports95percentoftheworldsdiamonds,asperstatistics
fromtheGemsandJewelleryExportpromotionCouncil(GJEPC).TheindustryisprojectedtogenerateuptoUS$35
billionofrevenuefromexportsby2015.
India'sgemsandjewellerysectorhasbeencontributinginabigwaytothecountry'sforeignexchangeearnings
(FEEs).TheGovernmentofIndiahasviewedthesectorasathrustareaforexportpromotion.InFY14,India'sgems
andjewellerysectorcontributedUS$34,746.90milliontothecountry'sFEEs.

Marketsize
AccordingtoareportbyResearchandMarkets,theJewelryMarketinIndiaisexpectedtogrowataCAGRof15.95
percentovertheperiod20142019.
ThegoldjewelryexportsfromIndiawereUS$554.45millioninDecember2014,whilesilverjewelleryexportswere
US$148.49million,accordingtothelatestdatareleasedbytheGemsandJewelryExportPromotionCouncil
(GJEPC).
Thecumulativeforeigndirectinvestment(FDI)inflowsindiamondandgoldornamentsintheperiodApril2000
December2014wereUS$476million,accordingtoDepartmentofIndustrialPolicyandPromotion(DIPP).
FY14sawanincreaseof12.65percentinexportofcutandpolisheddiamondswiththesegmentreachingUS$
19,635million.Theindustryalsowitnessedariseof11.98percentinimportsofroughdiamondswithfiguresofUS$

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8/11/2015

GemsandJewelleryIndustryinIndia,Indian,Diamond,Gold,Sector
16,716million.Indiaimported163.11millioncaratsofroughdiamondsworthUS$16.34billionandexported36.46
millioncaratsofpolisheddiamondsvaluedatUS$20.23billionin2013.Thecountryexportedgemsandjewellery
worthUS$36.04billionin2013.
Also,platinumjewellerycouldbreachtheRs2,500crore(US$402.95million)markinFY15,accordingtoresearchby
IKONMarketingConsultants.

Investments/Developments
Thesectoriswitnessingchangesinconsumerpreferences,asthewesternisationoflifestyleisresponsiblefor
changesinthebuyinghabitsoftheconsumer.Consumersaredemandingnewdesignsandvarietiesinjewellery,and
brandedjewellersareabletofulfilltheirchangingdemandsbetterthanthelocalunorganisedplayers.Increaseinper
capitaincomehasledtoanincreaseinsalesofjewellery,asjewelleryisastatussymbolinIndia.
JewellerymajorJoyalukkashasplannedtoinvestRs1,500crore(US$241.74million)onitsexpansionplanthat
entailssettingup20storesinIndiaand10overseas.Thenewstores,whichwillcomeupalmostinanyears
time,willaddtotheThrissurheadquarteredcompany'sexisting95outlets.
LondonheadquarteredGemfields,amultinationalfirmspecialisingincolourgemstonesminingandmarketing,is
planningtoacquirecolourgemstoneminesinOdishaandJharkhand,andparticipateintheexplorationofthe
KashmirsapphireminesinJammu&Kashmir.
Inoneofthelargestprivateequity(PE)dealsinthejewellerymanufacturingsegment,theIndiaarmofUSprivate
equity(PE)firmWarburgPincushaspickedupaminoritystakeinKeralabasedjewellerymakerandretailer
KalyanJewellersforRs1,200crore(US$193.41million).Thejewellerwillusetheproceedsfromthedealtofund
itsretailandmanufacturingexpansionplans.
Thegovernmentisdiscussingaplantosetupaspecialzonewithtaxbenefitsfordiamondimportandtradingin
Mumbai,totryanddevelopthecountry'sfinancialcapitalasacompetitortoAntwerpandDubai,whichare
currentlytradinghubsforthepreciousstone.
WellknownjewelleryretailerInIndiaTribhovandasBhimjiZaveriLimited(TBZ)isinvitingfranchiseestobeapart
ofitsjewelleryretailingbusiness.ThroughtheTBZFranchisingopportunity,entrepreneurscanopenTBZThe
OriginalstoresacrossIndiaandretailthebrand'sproduct,whichincludesover20,000inhousedesigns.TBZLtd
planstoopenfranchiseesincitiesacrossIndiawhereitisnotpresentatthispointoftimethroughitsexclusive
brandoutlets(EBOs).

GovernmentInitiatives
TheReserveBankofIndia(RBI)hasliberalisedgoldimportnorms.Withthis,starandpremierexporthousescan
importthecommodity,whilebanksandnominatedagenciescanoffergoldfordomesticuseasloanstobullion
tradersandjewelers.Also,IndiahassignedaMemorandumofUnderstanding(MoU)withRussiatosourcedataon
diamondtradebetweenthetwocountries.Indiaisthetopglobalprocessorofdiamonds,whileRussiaisthelargest
roughdiamondproducer.TheGovernmentofIndiaisplanningtoestablishaspecialzonewithtaxbenefitsfor
diamondimportandtradinginMumbai,inanefforttodevelopthecityasarivaltoAntwerpandDubai,whichare
currentlythetoptradinghubsfordiamond.
Inanothersignificantdevelopment,theGemsandJewellerySkillCouncilofIndiaisplanningtotrainoverfourmillion
personstill2022asthesectorisfacingshortageofskilledmanpower.Thecouncilaimstotrain,skillandenhance
4.07millionpeopleby2022.ThecouncilwilltieupwiththeexistingtraininginstitutesincludingGemologicalInstitute
ofAmerica(GIA)andIndianGemologicalInstitute(IGI),alongwithsettingupofnewinstitutesinmajordiamond
cuttingandprocessingcentres,Gems&JewelleryExportPromotionCouncil(GJEPC)saidinastatementhere.

RoadAhead
Inthecomingyears,growthintheindustrywouldbehighlycontributedwiththedevelopmentofthelarge
retailers/brands.Establishedbrandsareguidingtheorganisedmarketandareopeningopportunitiestogrow.
Increasingpenetrationoforganisedplayersprovidesvarietyintermsofproductsanddesigns.Theseplayersarealso
offeringfinancingschemestoconsumerstofurtherboostsales.Also,therelaxationofrestrictionsofgoldimportis
likelytoprovideafilliptotheindustry.Theimprovementinavailabilityalongwiththereintroductionoflowcostgold
metalloansandlikelystabilisationofgoldpricesatlowerlevelsisexpectedtodrivevolumegrowthforjewellersover
shorttomediumterm.Thedemandforjewelleryisexpectedtobesignificantlysupportedbytherecentpositive
developmentsintheindustry.
RateUsed:INR1=US$0.016asonFebruary25,2015
References:MediaReports,PressReleases,GJEPCReport
Disclaimer:ThisinformationhasbeencollectedthroughsecondaryresearchandIBEFisnotresponsibleforanyerrorsinthesame.

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