Gems and jewellery form an integral part of Indian tradition. A legacy passed from one generation to another. The components of jewellery include not only traditional gold but also diamond, platinum accompanied by a variety of precious and semi-precious stones.
The Indian gems and jewellery sector is expected to grow at a CAGR of around 13 per cent during 2011 – 2013, on the back of increasing government efforts and incentives coupled with private sector initiatives, according to a report ‘Indian Gems and Jewellery Market Forecast to 2013’, by RNCOS.
As per the credit rating agency Crisil, the diamond industry in India is predicted to remain stable during 2010-11 due to improved prices and steady demand.
Gems and jewellery exports from India is expected to grow by 30-35 per cent in 2010-11, according to the Gem and Jewellery Export Promotion Council (GJEPC), on the back of revival in demand in the international markets.
Although, the market is highly dominated by the unorganised players, with increase in consumer income and economic prosperity, the future of organised retail in India is very bright.
In its bid to enhance the market strategy, a gems and jewellery special economic zone (SEZ) sprawling over 40 acres with an investment of US$ 441.1 million is being planned to be set up by Gold Souk, the jewellery mall developer. The company plans to have residential apartments named Gold Souk City, apart from having gems and jewellery manufacturers from Thailand and Dubai who will open their units in India.
India is one of the largest bullion markets in the world. It has been until now, the undisputed single-largest Gold bullion consumer.
As per the study ‘Heart of gold' by the World Gold Council (WGC), a body of gold producers, India owns over 18,000 tonnes of above-ground gold stocks (all physical and gold holdings, including private, Reserve Bank of India and institutional) worth around US$ 800 billion.
Jewellery demand in India grew by 36 per cent to 184.5 tonnes in the third quarter ending September 2010, according to the WGC. The sale of jewellery items stood 135.2 tonnes in the July-September period of 2009. India's jewellery demand reached a remarkable US$ 7.42 billion in the third quarter, 67 per cent higher than the same period of 2009.
Gold import is likely to rise by 15 per cent in 2011 to around 805 tonnes, as compared to 2010 due to growing demand for gems and jewellery, according to Vinod Hayagriv, Chairman, All India Gems and Jewellery Trade Federation.
Gold imports stood at US$ 21.2 billion during the period April-November 2010. The net imports of gold bars during April-November 2010 reached US$ 3.1 billion.
In the world official gold holdings ratings, India stood at 11th position with 557.7 tonnes of gold reserve as of October 2010, as per the World Gold Council.
India is the world's largest diamond cutting and polishing centre in the world. It accounts for 60 per cent value share, 82 per cent by carats and 95 per cent share of the world market by number of pieces.
Surat is India's diamond processing hub, contributing over 80 per cent of the country's diamond processing industry with annual revenue of around US$ 13.03 billion.
It is the third largest consumer of polished diamonds after the US and Japan.