Gems and Jewellery sector forms an integral part of the Indian economy as it forms a major component of the export-led growth. The industry has been growing at a good pace over the last few years and contributed for 14 per cent of the revenues in India’s total merchandise exports in 2011-12.
Jewellery is a luxury component and the Indian luxury market is growing at a compounded annual growth rate (CAGR) of 25 to 30 per cent per annum. Jewellery, the largest segment of the luxury market, accounts for about 50 per cent of the total luxury products sold in the country. With India standing as a strategic market for gems and jewelleries, more and more multinational companies are foraying into the lucrative space and tuning their strategies to woo the country’s high net-worth individuals (HNIs).
India is considered to be the hub and one of the most competitive jewellery markets in the world owing to its lower costs of production and availability of highly skilled labour. A positive business environment coupled with various incentives offered by the Government has further strengthened the country's position as a major destination for gems and jewelleries.
The gems and jewellery industry majorly includes sourcing, processing, manufacturing and selling of precious metals and gemstones such as gold, platinum, silver, diamond, ruby, sapphire, among others. The highly fragmented sector comprises of more than 500,000 gems and jewellery players across the country, with the majority being small players. Though organised retail accounts for about 4-6 per cent of the entire market, Indian is increasingly getting acclaimed as an international sourcing destination for high-quality designer jewellery. Global companies such as Walmart and JC Penney source jewellery from India.
Some of the major brands in the Indian jewellery segment are Gili, Tanishq, Carbon, Oyzterbay and Trendsmith while companies like Reliance Retail, Damas Jewellery, Gitanjali Gems Ltd., Swarovski, Diamond Trading Company, Vardhaman Developers, Dubai-based Joy Alukkas, Viswa and Devji Diamonds and Gold Souk India are major players in the Indian gems and jewellery retail sector.
Gold and diamond are two major components of the gems and jewellery sector. India is the largest consumer of gold, accounting for over 20 per cent of the total world gold consumption. Gold jewellery forms around 80 per cent of the Indian jewellery market, with the remaining comprising of fabricated studded jewellery (including diamond and gemstone studded jewellery). A substantial portion of the gold jewellery produced in India is consumed in the domestic market only.
- Shree Ganesh Jewellery House (SGJH) has formed a joint venture (JV) with Rocks Creation Limited of Dhaka, Bangladesh for manufacture of gold jewellery, both plain and studded with diamonds and other precious and semi-precious stones.
- World Gold Council (WGC) has formed a separate private company in India to take up activities on a larger scale in the Indian market including entering into commercial set-up with banks and gold industry players in the coming years. The corporate structure will legally help WGC remove the disadvantages of operating as a liaison office.
Currently, the Reserve Bank of India (RBI) prohibits any liaison office from entering into any commercial activity in the country and it could only promote the existence of parent entity and not any individual products of any Indian entity.