The Indian jewellery market is dominated by gold, which consists of almost 80 per cent of the market share, followed by fabricated studded jewellery including diamond and gemstone studded jewellery.
India is one of the premier locations for diamond manufacturing. The prospect of being able to open a truly world class diamond mine in India in the next few years and take India into the top 10 diamond producing regions in the world is a strong possibility, as per Stefanie Loader, Bunder Project Director, Rio Tinto. Further, India has also emerged as the largest cutting and polishing industry for diamond in the world.
The gems and jewellery industry in 2011-12 has gone up by about 5 per cent at Rs 2,000 billion (US$ 36.10 billion) against Rs 1,950 billion (US$ 35.20 billion) in 2010-11.
The sector accounted for India's 14 per cent of the total merchandise exports. On the contrary, the imports of raw materials for making gems and jewellery stood at 32 per cent at Rs 721.60 billion (US$ 35.20 billion) in 2011-12 over Rs 545.64 billion (US$ 9.84 billion) in 2010-11.
The jewellery industry in India is estimated at Rs 1,500 billion (US$ 27.07 billion), of which only 5 per cent is organised, thus creating opportunity for the foreign players to enter the Indian market.
Gold has always been the jewellers' favourite metal given its intrinsic luster and ease of fabrication. Gold jewellery enjoys the leading position in most markets across the world, and in many ways forms the backbone of the precious jewellery industry. Given the fact that gold is also one of the traded metals, gold jewellery consumption is also impacted by gold price movements.
South Africa has urged Indian jewellery firms to invest in manufacturing facilities as it seeks to encourage value addition to the gold produced in its country. Stefanus Botes, Minister Counsellor - Economic, South African High Commission said his country is willing to offer both fiscal and capital incentives to Indian companies setting up jewellery units. Besides, the Indian firms can take advantage of the "favourite nation status" to export to the US from South Africa. "Exports from South Africa to US are free of import duty and the Indian companies can get a 6 per cent cost advantage over other nations," Botes added.
The jewellery companies in India, in particular diamond, have brought about a new trend, by rolling out low-cost diamond range to target the young adults. "Teenagers and young adults are moving from costume and junk jewellery to light gold, silver and diamonds," according to Mehul Choksi, Chairman and Managing Director, Gitanjali Gems Ltd. Jewellery demand in India grew by 13 per cent to Rs 1,340 billion (US$ 24.19 billion) in 2011, as per a report by the World Gold Council (WGC) .
The glittering gems cut and polished in Surat, the world's biggest diamond cutting and polishing centre, is soon going to become the best friends of the Pakistani consumers. For the first time, a high level delegation from the Indian gems and jewellery industry led by the Gems and Jewellery Export Promotion Council (GJEPC) will cross the Wagah border to participate in the Pakistan International Gems and Jewellery Exhibition, a four-day show organised by Pakistan Gems and Jewellery Development Company (PGJDC) in Karachi starting June 7, 2012.
A first of its kind, this initiative supported by the Governments of India and Pakistan aims to strengthen the trade ties between the two countries and leverage the huge potential of gems and jewellery trade. The Indian gems and jewellery industry market is estimated to be worth US$ 20 billion and Pakistan market is estimated to be around US$ 10 billion, according to Sanjay Kothari, Vice-Chairman, GJEPC.
This segment includes all other forms of jewellery; precious gemstones (emeralds, sapphires, rubies and tanzanite) and semi-precious gemstones; silver, pearls, etc. The industry is highly fragmented, thus generates business opportunity for the organised retailers and dealers to flourish.
The exports of coloured stone/ gems from India have grown by 15 per cent to Rs 16.53 billion (US$ 298.40 million) this year from Rs 14.32 billion (US$ 258.58 million) last year. Coloured gemstone processors of Jaipur, one of the world's major hubs for colour stone processing, have come together to form a company. About 50 colour stone makers have initiated procedures to form a company called Color Stone Gems India (CIL) with an equity capital of Rs 1 billion (US$ 18.05 million).
"With this company, colour stone processors would be able to earn long-term supply contracts from rough mining nations and can make an impact in export markets by jointly working on creative issues," said Rajiv Jain, Owner of Sambhav Jewels and Chairman, GJEPC.