The Economic Times states that India’s domestic market is bolstering the recession-hit Indian diamond industry, www.israelidiamond.co.il reports. According to the newspaper, diamond jewelry sales in India are expected to reach Rs 25,000 crore this fiscal year.
These estimates are significant as last year diamond sales were in the Rs 18,000-20,000 crore range. The diamond trade’s 20% growth is being attributed to the growing popularity of diamonds along with the increasing preference for this precious stone among investors. This trend constitutes a significant shift from India’s perception as a predominantly gold jewelry market.
Mehul Choksi, CMD of Gitanjali Gems and Chairman of Ficci’s Gems and Jewelry Committee, is quoted as saying: “Demand for diamond jewelry is increasing slowly in India. With gold prices increasing, people are moving towards diamond jewelry and this year, we expect diamond jewelry sales to touch Rs 25,000 crore here.” Choksi added that Diwali festival sales contribute more than 20% to the total diamond jewelry sales in the country. He predicted that during the current festival season diamond jewelry demand will be 50% higher than last year.
Analysts attribute the shift in consumer preference towards diamond jewelry to the rising gold prices. With gold prices hovering around Rs 15,000 per 10 gm, consumers are moving to diamond-studded, lightweight gold jewelry.
According to The Economic Times, since the financial crisis which struck the US jewelry industry, the Indian diamond industry has been promoting sales in China and the Middle East, in addition to the domestic market.
India’s Gem and Jewelry Export Promotion Council (GJEPC) is currently launching a campaign in 16 cities to promote domestic diamond jewelry sales.
Sanjay Kothari, convenor (promotion, marketing and business development) of GJEPC stated: “Around 25,000 buyers visited 1,500 stalls in India’s biggest jewelry show, India International Jewelry Show(IIJS), recently, out of which 22,000 buyers were from the domestic market. The sector is unorganized and it is difficult to give exact figures. However, we expect good sales of diamond jewelry in the country this year.”
Choksi noted that while the overall diamond jewelry business is expected to register a 20% growth, branded jewelers in the jewelry industry hope to register a 40-50% growth rate. Choksi pointed out that consumer awareness in connection to diamond certification is increasing, thus helping to promote jewelry brands. The demand for diamond and color stone-studded gold jewelry is not increasing only in large Indian cities, but also in medium and semi-urban areas.
