Though the year 2014 saw many ups and downs, it has ended with a sense of achievement for the Indian gem and jewellery industry. And, with renewed confidence, the industry players seem to be ready to take on the coming year, head on. While trading did not have the usual vigour in the diamond district of Mumbai during the month of December, liquidity concerns among diamond manufacturers were significantly high due to the current bank-financing scenario prevalent in the country.
In the first week of the month, a few overseas buyers were eager to conclude deals due to uncertainty in terms of prices, especially for high-end goods. As consuming markets like US, Far East and Middle East were showing increased demand for stars and melees, some buyers who came into Mumbai towards the last fortnight of the month, looked for better deals, hoping for further softening of prices, sensing the ‘over stocked’ situation in the market. At this juncture, a price correction in polished goods would do well for the market, which will move into a ‘slow demand scenario’, in a few months. Rough trading was slow during the month. In the domestic market, demand for polished goods remained stable. In the retail jewellery sector, there was sufficient movement. However, the domestic players are still lobbying for cut in import duty on gold, which will give a ‘shot in the arm’ for the jewellery sector.
India’s exports are picking up as can be seen in the figures for the previous month, announced by GJEPC. The cut and polished exports for the month of November 2014 registered an increase of 10.81 percent to $1,559.34 million (2,590,000 carats) as against $1,407.28 million (1,826,000 carats). Rough imports, too, recorded $1,544.83 million (14,964,000 carats) for November 2014 from $1,139 million (11,322,000 carats) for November 2013, indicating a growth of 35.57 percent.
The World Diamond Conference held in New Delhi was one of the major events in year 2014. The Gem & Jewellery Export Promotion Council (GJEPC), in association with the Ministry of Commerce and Industry, GOI and World Diamond Mark Foundation (WDMF) organized the first ever-global congregation of diamond leaders. The Indian government announcing the idea to establish a Special Notified Zone at the Bharat Diamond Bourse (BDB) for overseas producers/miners to bring roughs on consignment basis put some spirit into the Indian industry. And of course Russia’s ALROSA finalizing three year contracts for direct rough supply to 12 Indian diamond companies beginning 2015 has brought much relief to the industry and was welcomed with great enthusiasm.
Indications that the domestic market is doing pretty well can be understood when share price of gems and jewellery companies shot up by 7 per cent during mid-December, due to estimates of an improvement in margins this festive season. While share price of Gitanjali Gems shot up by 7.39 per cent to Rs 55.25 apiece, that of Shantivijay Jewels jumped 4.93 per cent to Rs 61.75 apiece. Leading players in this sector, Rajesh Exporters and Shrenuj & Co also reported a jump in their share prices. The gold supply pressure has eased as the Indian government in November 2014 withdrew 80:20 scheme under which a fifth of imported gold was made mandatory to supply to jewellery exporters. While the domestic market is doing well, jewellers are getting positive indications from global markets as well. Though the Government of India proposed to make amendments to the Bureau of Indian Standards Act (BIS Act, 1986) with regard to hallmarking of precious metals and jewellery, including gold, it has announced that it will not immediately move towards making the scheme mandatory.
Many high-end jewellers are spreading their wings to make their presence felt in all the major metro cities in the country. Entice, the fine jewellery brand by the century old KGK Group, has opened its fifth boutique in India in Bengaluru recently, which is the Group’s fifth standalone boutique in India and 17th across the globe. Jewellery major Joyalukkas, too, has chalked out an Rs 15 billion expansion plan that entails setting up 20 stores in India and 10 overseas. The company is looking at expanding its footprint in the US, Sri Lanka and Europe. Currently Joyalukkas has 51 stores in India and 44 overseas stores including operations in London, Singapore, the UAE, Saudi Arabia, Bahrain, Oman, Kuwait and Qatar.
And, as an indication that e-commerce is come of age in India, Amazon, the e-tailing giant has brought together top traditional jewellery retailers like Orra, Tara Jewellers, Mehrasons Jewellers, Gitanjali Jewels, Rose Group and others, on to its Indian online marketplace. Several other retailers, too, have entered into an exclusive tie-up with Amazon India. Is e-retailing or e-tailing as some would like to call it, the future in India? Maybe not anytime soon, but one sees both ‘online’ as well as ‘brick-n-motar’ jewellery business thriving and maybe even complement each other.
Aruna Gaitonde, Editor in Chief of the Indian Bureau, Rough&Polished
