The jewellery sector has started preparations for a dismal 2012, anticipating a slowdown based on the prevailing circumstances, the Business Standard, an Indian online daily, says. Rajiv Jain, Chairman of the Gems & Jewellery Export Promotion Council (GJEPC), in an interview with Dilip Kumar Jha explains the concerns for the domestic market, but says exports could grow satisfactorily. Excerpts:
With business hampered by global economic slowdown, how is the jewellery sector performing?
We agree the overall business environment is currently unfavourable, hampered by global economic slowdown first in the US and now in Europe. The West Asia market after the debt crisis of Dubai and the turmoil in different countries of the region is also not looking good. Faced with this condition, the Indian goods are trying to be competitive and increase their market spread. In recent times, we have started aggressive promotion in China, Russia and have plans to target Africa and Latin America in future.
How will the falling rupee affect India’s jewellery sector?
The decline of the rupee will have an impact on the demand of jewellery in the domestic market. However, in case of exports, both import and export transactions are done in dollars as the raw materials like diamonds, bullion, etc, are imported from abroad. So, till the dollar credit from banks for sourcing such raw materials is available, we may not face difficulties in the short run. However, as a result of this, if the Indian economy fares badly, we may face challenges in future.
Today, when high inflation has drilled consumers' pocket leaving less disposable money, how would the jewellery sector grow?
The sector is going through very difficult times, as in the recent past bullion prices have increased 15-20 per cent. Prices of diamonds have also increased substantially. In this scenario, when the income levels of the consumers are not growing, growth of the jewellery sector will depend upon how we can target the entire segment and get purchases from the nouveau riche consumer of India and China.
What are your estimates for the ongoing buying season?
Christmas, New Year and Mothers’ Day in the US should not be that bad, as US consumers’ confidence on jewellery has increased due to the recent economic turmoil in the country, whereas the European markets are totally dull and are not showing sign of picking up. The initial trade from US at a retail level is encouraged. However, in India there is a feeling of gloom due to the slackening economy and in my opinion the wedding season, too.
Do you think there is a need for more nominated agencies for gold imports, to solve the availability issue in the countryside?
The presence of more nominated agencies will not solve the problem till such agencies show willingness to supply bullion to the expor-ters.
How would rough diamond imports from Zimbabwe impact the Indian processing sector?
With diamond jewellery demand growing and absence of new mines, the supply from mines in Zimbabwe can be a major alternative for processing countries like India, Israel, China, etc. However, all will depend upon how much these processed diamonds can be traded with countries like the US and Europe, who are till date the major consumers of diamond jewellery.
Is labour availability an issue for the diamond processing industry? What is the way forward?
With the advent of new technology and other options for the working class of India, the availability of labour in the coming days will be a challenge for the gem and jewellery sector. The solution lies in organising efforts of skilling and re-skilling of such workers through planned development programmes. One option is setting up a Gem & Jewellery Sector Skill Council in National Skill Development Corporation, which is under way and will have answers to these problems.
