exporting pearls, gems and jewellery to hong kong - a guidebook

B U S I N E S S O P P O R T U N I T I E S I N H O N G K O N G F O R I N D I A N B U S I N E S S

Exporting Pearls, Gems and Jewellery to Hong Kong

- A Guidebook

l

Consulate General of India Commercial Wing

26A, United Centre, 95, Queensway, Hong Kong Phone: +852.2528.4476, Fax: +852.2529.0421

[email protected] [email protected] http://www.indianconsulate.org.hk

l March 2003 l

The Consulate General of India, Hong Kong is pleased to bring out “Exporting Pearls, Gems and Jewellery to Hong Kong - A Guidebook”. This new addition in our publication series on product reports provides the relevant background information to Indian export promotion organisations and companies interested in pursuing business opportunities in and through Hong Kong. This practical guide also offers a resource base to enable our exporters access more detailed information on specific issues. In the light of the increasing integration of the economies of Hong Kong and the Chinese Mainland, we have added separate sections on China.

This booklet has been compiled by my colleagues, Mr. K. Govindan, Consul and Mr. M. Sridharan, Consul, assisted by Ms. Kiran Juneja, Ms. Ada Lee and Ms. Rashmi Ayyar. We received useful inputs for this project from the Embassy of India, Beijing and the Gems and Jewellery Export Promotion Council, India.

A ‘soft’ copy of this report can be downloaded from our website: www.indianconsulate.org.hk

We hope this publication will be useful to Indian organisations and companies interested in doing business with Hong Kong and Mainland China. We would appreciate their suggestions and feedback.

Ashok K. Kantha Consul General of India Hong Kong

EXPORTING PEARLS, GEMS AND JEWELLERY TO HONG KONG

Consulate General of India, Hong Kong ii

Table of Contents

EXECUTIVE SUMMARY ......................1

1. INTRODUCTION ............................13

2. HONG KONG IMPORT SCOPE.....15

2.1 Hong Kong Economy .................15 Changing Structure of Economy....15 Regional Hub.................................15 ‘One Country – Two Systems’ ......16

2.2 Hong Kong: Basic Facts.............16

2.3 Hong Kong Market.....................17 Market Overview...........................17 Product Overview..........................18

Pearls and Gems........................18 Jewellery ...................................18

2.4 Market Dynamics .......................18 New Opportunities ....................18 Production Aspects ...................19 Product Trends..........................19 Marketing Channels ..................20 Standards and Rules..................20

3. INDIA’S EXPORT SCOPE..............23

3.1 Major Exporters to Hong Kong 23 Pearls .............................................23 Diamonds.......................................24 Coloured Stones.............................24 Imitation Jewellery ........................25 Precious Metal Jewellery...............26 Jewellery Articles ..........................26

3.2 India’s Exports to Hong Kong...27

3.3 India’s Share and Future Scope 28 Pearls and Gems........................28 Jewellery ...................................30

4. ENTERING THE MARKET.............33

4.1 Exhibitions ..................................33 Trade Fairs in Hong Kong .............33 Market Access Initiative ................36 Trade Fairs in India........................37

4.2 Services by the Consulate ..........38 Business Delegations .....................38 Product Studies ..............................38 Trade and Investment Queries .......39 Newsletters ....................................39 Business Centre .............................40

Website.......................................... 40

5. OPPORTUNITIES IN CHINA.......... 41

5.1 Market and Industry.................. 41 Market Overview........................... 41 Policies .......................................... 42 Industrial Bases ............................. 43 China and the WTO....................... 44 Important Exhibitions .................... 44

5.2 India’s Exports to China............ 46

5.3 Services Offered by the Embassy............................................................ 46

6. INDIA’S POTENTIAL ..................... 47

6.1 Industry Overview...................... 47

6.2 Major Products........................... 48 Diamonds and Coloured Stones..... 48 Jewellery........................................ 50

6.3 Policy Measures .......................... 51 Exim Policy 2002-07 ..................... 51 Budget 2003-04 ............................. 52

6.4 Organisations and Institutions .. 53

7. BACKGROUND INFORMATION ... 55

7.1 India-Hong Kong Relations ....... 55 Overview ....................................... 55 Trade Links.................................... 56 Investment Links ........................... 58

7.2 India - China Economic Links... 59 Trade Links.................................... 59 Investment Links ........................... 61

7.3 Practical Business Tips .............. 62 Business Tips for Hong Kong........ 62 Additional Tips for China.............. 62

8. RESOURCES ................................. 65

8.1 Key Contacts............................... 65 Hong Kong Contacts ..................... 65 Mainland China Contacts .............. 73 India Contacts................................ 74

8.2 Online Resources ........................ 76

9. READER EVALUATION ................ 77

Consulate General of India, Hong Kong 11

Exporting Pearls, Gems and Jewellery to Hong Kong - A Guidebook

Executive Summary Market Overview Products Overview Market Dynamics Major Suppliers India’s Export Potential India’s Export Opportunities Strategies for Entering Hong Kong Market Further Information Opportunities in Mainland China

his publication, “Exporting Pearls, Gems and Jewellery to Hong Kong – A Guidebook” is meant to assist Indian trade promotion organisations and export companies involved in exporting Indian pearls, gems and

jewellery. According to Standard International Trade Classification (SITC) system, this report covers pearls, precious and semi-precious stones (SITC: 667) and jewellery (SITC: 897).

Market Overview

Hong Kong imports over US$6 billion worth of pearls, gems and jewellery annually. Hong Kong's imports in this sector grew from US$4.5 billion in 1999 (+31.3%) to US$5.7 billion in 2000 (+25.5%). There was a slight dip in 2001, mainly due to global economic slowdown and the impact of September 11, during which Hong Kong's

imports came down to US$5.3 billion (-6%). However, in 2002, Hong Kong's imports grew by +18.8% to reach US$6.3 billion. In 2002, Hong Kong exported US$5.4 billion (+22.1%) worth of goods under this sector, of which US$4.7 billion (+24.8%) were in fact re-exports.

Out of Hong Kong’s annual exports of pearls and gems of US$2.96 billion, 99% are actually re-exports, with the value of US$2.92 billion. Hong Kong is the second largest exporter of precious jewellery in the world. However, about 3/4th of its precious jewellery exports are re-exports. Similarly, Hong Kong is one of the leading production centres of pure gold items and jade jewellery. It is also

Summary

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T

Out of Hong Kong’s US$5.4 billion exports, US$4.7 billion were re-exports.



evolving into a leading trading and distribution centre for pearls in the recent years. Hong Kong is the leading exporter of imitation jewellery in the world. This shows Hong Kong is mainly a trading hub in the pearls, gems and jewellery sector.

Hong Kong has established itself as one of the important exhibition centres for promoting pearls, gems and jewellery products. Hong Kong imports pearls, gems and jewellery products mainly for re-exporting to other markets in the world and for local consumption to a limited extent. Moreover, Hong Kong provides opportunities to meet pearls, gems and jewellery importers from around the world and sell these products to their respective markets. It is to be noted that offshore trade is not being captured by the ordinary trade figures of Hong Kong’s foreign trade, the statistics do not necessarily reflect the export business managed by Hong Kong companies.

Hence, Hong Kong offers good business opportunities for pearls, gems and jewellery products by way of export and re-export of raw materials, intermediaries, accessories, finished products, etc., apart from providing a regional exhibition platform for these products.

Products Overview

Pearls, precious and semi-precious stones formed 77.3% of Hong Kong’s total imports in 2002 under the pearls, gems and jewellery sector. During this period, the value of Hong Kong’s total imports of pearls and gems was US$4,876 million, which saw a growth of +19.7%. It is to be noted that during the same period, the value of Hong Kong’s re-exports under this category was US$2,924 million (+27.3%), forming 99% of its exports, valued at US$2,964 million (+26.3%).

In 2002, the value of Hong Kong’s imports of jewellery was US$1,435 million, which saw a growth of +16.1% and formed 22.7% of Hong Kong’s total intake of pearls, gems and jewellery. During the same period, Hong Kong exported US$2,442 million worth of products under this category (+17.4%), of which US$1,781 million were re-exports (+20.9%). Of the products produced in Hong Kong, the gem-set jewellery is the most popular one, particularly diamonds set in 14K or 18K gold.

Market Dynamics

China’s entry into the WTO comes with its commitment to lower import tariff on most finished precious-jewellery in phases, thereby providing one of the major market openings in the industry. Shanghai Diamond Exchange

and Shanghai Gold Council play a major role in the changing market environment in China.

Ordinary trade figures do not reflect the export business managed by Hong Kong companies or business deals made by international buyers in Hong Kong.

China has committed to lower import tariff.



Due to the rapidly emerging Chinese pearl industry, Hong Kong is striving to emerge as a leading trading and distribution centre for pearls, especially for cultured pearls, in recent years. Hong Kong, with its global experience as a trading hub has established new links and enhanced its existing links to expand its markets for pearl trade. Indian exporters of pearl and articles of pearl can use Hong Kong also as one of their routes to reach out to new markets and buyers around the world.

While the jewellery industry around the world remains basically a handicraft industry, a number of larger establishments have made use of sophisticated and automated production equipments. Although value-added processes are still retained in Hong Kong, manufacturing processes are increasingly being shifted to Mainland China, mainly Shenzhen and Panyu.

The focus on design in the production process is getting more importance. Increasingly more players in the pearls, gems and jewellery sector make use of computer aided design (CAD) technology to shorten the time cycle for product development. Computer numerically controlled (CNC) machine tools are also increasingly employed by many manufacturers to meet the stringent needs of quality

control and standard specifications. Suppliers with these facilities would be able to match and deliver the specifications in a smoother way to trading hubs like Hong Kong.

Jewellery designs have been increasingly influenced by the apparel fashion, especially due to the growth of younger buyers. Apart from the luxury market of feminine and romantic pieces of jewellery, the demand is growing for jewellery that is wearable with most of the modern dresses, including jeans, etc. Moreover, large fashion retail chains, for example, Chanel in Europe, are offering fashion jewellery as accessories, complementing their new lines of fashion. Such developments would contribute to an increased demand under high-end category. Hong Kong’s experienced links with high-end brands will help in this regard.

Innovations are always in demand in the gems and jewellery industry. Trends like two-tone jewellery are offering new look and feel for the consumers. Typically a blend of yellow and white gold, two-tone jewellery is seen in the market offering modern and sophisticated look.

On marketing and distribution, jewellery manufacturers are building up individual branded jewellery or having licensing agreements. This has created a necessity for the jewellery manufacturers to move into distribution also. Separately, a rapid development of on-line shopping, though yet to achieve the critical mass, is also noteworthy.

The concept of brick-and-click, combining direct sales outlets with on-line product showcasing, is expected to continue at least for the coming few years.

Hong Kong’s manufacturing processes are increasingly being shifted to Mainland China.

Jewellery manufacturers are building up individual branded jewellery.



Though Hong Kong’s jewellery scene is largely oriented towards export trade, the local retail and distribution channels are also gaining importance. This is mainly helped by the tourism industry. The Hong Kong Tourism Board estimated that tourist expenditure on jewellery amounted to about US$1 billion in 2001, of which two-thirds were attributed to visitors from Mainland China. Hong Kong companies with own brand names have started entering into Mainland Chinese market by opening their retail centres also.

Like other industrial sectors, the trend of consolidation is happening in the jewellery industry also. This trend is noticeable globally including in the Western markets. For example, in the USA, big players such as Wal-Mart, Target, Costco, K-Mart, etc have captured a bigger share of consumer spending. A recent survey by Search and Markets Limited reported that 20% of fine jewellery shoppers in the USA make their purchases at these outlets. This trend changes the dynamics of the market by

providing stronger bargaining power to these players against the individual suppliers. Trading hubs like Hong Kong are continuously under pressure to find jewellery products at competitive price and world-class quality to win buyers’ orders.

The trading of ‘conflict’ diamonds is a new concern for the gems and jewellery industry. The UN defines the conflict diamonds as diamonds that originate from areas controlled by forces and factions opposed to legitimate and internationally recognised governments and are used to fund the militia in opposition to those governments. Conflict diamonds, also called ‘blood diamonds’, originated in several war-torn African countries, including Angola, Congo, Sierra Leone, etc. Several non-governmental organisations have highlighted the fact that diamonds from these sources might have been sold through illegal channels to finance civil wars and conflicts in these regions. In response, a World Diamond Congress was held in Antwerp on 17 July 2000 in which The World Federation of Diamond Bourses and The International Diamond Manufacturer Association (IDMA) passed a 9-point plan in line with the UN Resolution to clamp down on conflict diamonds. This includes standardisation of certificate amongst the diamond exporting countries, transparency, auditing and monitoring of the regime and new legislation against those who fail to comply, etc.

India and Hong Kong are both signatories to this scheme and have resolved to monitor their diamond trade to avoid assisting conflict diamond traders. Hong Kong has introduced the certification scheme since 2 January 2003. Accordingly, Indian companies exporting or importing rough diamonds to Hong Kong should do so with Hong

Kong companies, which are registered with the Trade and Industry Department. These Hong Kong companies are required to obtain Kimberley Process Certificates (KPC) issued by the Trade and Industry Department before the import and export of rough diamonds. However, Indian export of diamonds is largely concentrated in polished diamonds and hence to that extent Indian export

Trading hubs like Hong Kong are continuously under pressure to find competitive jewellery products with world-class quality.

Trading of ‘conflict’ diamonds is a new concern for the gems and jewellery industry.



of diamonds to Hong Kong is insulated from the teething trouble of inspection regime. Restriction of conflict diamonds may at the most influence the price of rough diamonds in the market and this may have an indirect impact on our polished diamond prices in the world market as India imports 1/3rd of the global roughs that go into making polished diamonds.

Environmental and health concerns continue to be important factors in gems and jewellery trade. In the EU, imports of jewellery containing nickel, which could cause allergic reactions when in contact with skin, have been banned. Fashion jewellery products using other materials are in need as replacements to the EU market in this regard.

Major Suppliers

Hong Kong’s Pearls, Gems and Jewellery market is dominated by a few players. However, the market retains its sensitivity to changes in the world market and adapts swiftly. India is the single largest exporter of pearls and gems (SITC: 667) to Hong Kong. Its exports grew at +11.7% in 2002 and its value of exports reached US$1,825 million, accounting for 37.4% of the market. This is

followed by Israel (US$733 million, +31.9%, share 15%), Belgium (US$661 million, +36.7%, share 13.6%), the USA (US$482 million, +11.1%, share 9.9%) and UAE (US$288 million, +65%, share 5.9%).

China dominates the supply scene of Hong Kong’s import of jewellery (SITC: 897). Its exports grew at +13.5% in 2002 and its export value reached US$522 million, accounting for 36.4% of the market share. This is followed by Italy (US$243 million, +18.1%, share 17%), the USA (US$217 million, +22.9%, share 15.2%), Switzerland (US$138 million, +29.4%, share 9.6%) and Japan (US$49 million, +25.8%, share 3.4%)

India’s Export Opportunities

India’s export of gems and jewellery to Hong Kong market has grown from US$1,563 million in 1999 to US$1,854 million. It grew by +11.7% in 2002.

The gems and jewellery trade between India and Hong Kong is vibrant. Hong Kong is the second largest export destination of Indian diamonds and it takes 27% of Indian exports in this category, valued at more than US$1,600 million. About 10% of rough diamonds imported by India are also routed through Hong Kong, valued at US$389 million during 2001-02. Hong Kong is again the second largest export destination, with about 14% to 15% share, of India’s coloured gemstones, valued at about US$15 million. Hong Kong is also the fifth largest export destination of Indian gold jewellery, which reached US$38 million during 2000-01, accounting for about 3% share.

Hong Kong market retains its sensitivity to changes in the world market and adapts swiftly.



The following table provides information about India’s gems and jewellery export destinations during 2001-2:

INDIA’S GEMS AND JEWELLERY EXPORT DESTINATIONS (APRIL 2001 – MARCH 2002) (US$ million)

COUNTRIES DIAMONDS TOTAL GEMS & JEWELLERY USA 1972.71 2750.87 Hong Kong 1600.11 1638.36 Belgium 842.35 845.01 Japan 329.22 362.31 Israel 263.85 265.46

(Source: Gems and Jewellery Export Promotion Council, India)

Hong Kong’s total import of pearls, gems and jewellery has reached US$6,310 million in 2002. Hence, India’s share in Hong Kong’s market is 29% (US$1,854 million). However, India’s export basket under this sector is lop-sided with only a few products contributing majority of the value. Except for one single item, namely, non-industrial

diamonds, worked, not mounted (SITC: 66729), India’s share in almost all other products is meagre. This product alone contributed 94% of India’s total export value of pearls, gems and jewellery to Hong Kong in 2002 (US$1,738 million). In 2002, the value of India’s exports to Hong Kong under pearls and gems was US$1,825 million and that of jewellery was US$29 million (98:2). Hence, India’s export basket needs to be more diversified and balanced.

India is still known mainly as the leading exporter of cut and polished diamonds in the Hong Kong market. However, India’s strengths in the areas of jewellery are yet to be highlighted in the Hong Kong market, which is one of the largest exporters of precious jewellery in the world. Since India already has made inroads into this market with limited range of products, Indian exporters can also concentrate on expanding their product range. Hong

Kong could be one of the top focuses in India’s efforts to reach out to new markets in the region with a wider product range. Indian exporters can make use of the Indian community in Hong Kong of which a substantial number of Indians are involved in the gems and jewellery sector.

One of Hong Kong’s major strengths as a trading hub in the region is its dynamic adaptability in choosing its import sources and export destinations. Even under the pearls, gems and jewellery sector, Hong Kong is continuously looking for new sources of supply and new partners to collaborate to maximise its profits. New players are gaining the market share by offering a competitive alternative, in terms of cost, design appeal, niche products, etc. For example, UAE, a new entrant to the Hong Kong market in 2000, under the item non-industrial sorted diamonds, un-worked (SITC: 66722), has gained 29.4% of the market in 2002 with its exports reaching US$236 million. India’s exports have increased from US$13 million (share 3.5%) in 1999 to US$61 million (share 7.6%) in 2002.

Except for a single item, India’s share in almost all other products is negligible.

India is still known mainly as the leading exporter of diamonds, but not as fastest growing jewellery exporter in the world.



While India’s export value grew from US$1,634 million in 2001 to US$1,825 million in 2002, its share in the Hong Kong’s market declined from 40.1% to 37.4%. This is because of the fact that Hong Kong’s overall imports in this sector are growing at a faster rate than India’s exports to Hong Kong.

India’s Export Potential

India has a very long tradition of gems and jewellery manufacturing and export. The gems and jewellery industry provides employment to over 2.5 million people in India. Indian gems and jewellery industry is a crowing jewel of India’s export-led growth. It is the leading foreign exchange earner as well as the fastest growing industry in terms of export, with a remarkable growth rate of 10%. In 2001-02, gems and jewellery exports from India amounted to US$7.53 billion, or nearly one-fifth of the country’s total exports. The industry has registered a dramatic growth within a decade, with exports having shot up from US$2.93 billion in 1991-92 to its present level.

Today, India is the largest manufacturer and exporter of polished diamonds, is the fastest growing jewellery exporter and aspires to become a major trading centre. Diamond manufacturing sector contributes about 80% to the total gems and jewellery export basket. This also accounts for 55% of the world supply in terms of value, 80% in terms of caratage and 90% in terms of pieces. This means that nine out of ten stones set in jewellery worldwide come from India. India is also the largest consumer of gold on the planet, with a demand of over 850 tonnes, which is 1/3rd of the gold consumption on the planet. Naturally, India is also

the largest fabricator of gold. Despite its huge domestic demand, India is emerging as the fastest-growing jewellery exporter in the world, with an average growth of 44% over the last decade.

Strategies for Entering Hong Kong Market

Exhibitions

Indian pearls, gems and jewellery exporters can make a good beginning to enter the Hong Kong market by participating in pearls, gems and jewellery related Hong Kong exhibitions. Indian companies participate in related Hong Kong fairs like the Hong Kong International Jewellery Show, Hong Kong Jewellery and Watch Fair, etc. Gems and Jewellery Export Promotion Council of India organises India pavilions in these fairs. These exhibitions not only cater to the local Hong Kong traders but also to major buyers from all over the world, including North America, Europe, other Asian countries like Japan, Korea,

India is the largest manufacturer and exporter of polished diamonds, is the fastest growing jewellery exporter and largest consumer of gold on the planet.

Hong Kong exhibitions cater also to international buyers from North America, Europe, Japan, Korea, Mainland China, etc. Trade figures do not reflect this.



etc. Hong Kong pearls, gems and jewellery exhibitions can also provide an opening to enter Mainland China market, as scores of Mainland China traders and manufacturers visit Hong Kong exhibitions.

Exhibition Services by the Consulate

Indian pearls, gems and jewellery exporters desiring to participate in these exhibitions can contact the Consulate General of India for updated information about these fairs, including relevance of these exhibitions to their products, track record of the exhibitions regarding visitor profile and turnout, calendar, contact details of the organisers, etc. A list of important Hong Kong importers of that particular product can also be provided to facilitate pre-exhibition promotion and meeting arrangements.

For an Indian organisation organising an India pavilion, support is given in terms of identifying a stall construction contractor, stall designs, execution and facilities for Indian exhibitors, arranging interpreters, booth assistants, etc.

Market Access Initiative

Indian pearls, gems and jewellery export organisations can provide impetus to the focus on the Hong Kong market by planning Market Access Initiatives (MAI) for Indian exporting companies. To participate in pearls, gems and jewellery trade fairs in Hong Kong, MAI can be structured so that over a period of three years, the exporters get the support to participate in Hong Kong trade fairs by way of getting, say 75%, 50%, 25% of the cost of participation from the organisation. After the third year, the individual company will be able to participate on its own having realised the potential of the market and the trade volume. Focus can be on the regions in India, which need additional thrust to promote local products and capabilities through International exhibitions.

Even though the number of Indian companies participating in the exhibition can increase on its own by the potential of the market, if all the Indian pearls, gems and jewellery exporting companies are brought under India pavilion organised by the export organisations of India, this would provide a greater business impact. All these stalls would be decorated with an Indian theme and this would project the

size of Indian participation in the exhibition and India’s interest in the market.

Business Delegations

Indian pearls, gems and jewellery export organisations can organise business delegations to Hong Kong. These delegations can be composed of select exporters whose products have more relevance to the Hong Kong market. Complete information about the members of the delegation along with their trade interest may be made available to the Consulate General of India, Hong Kong. The Consulate would arrange business interactions with pearls, gems and jewellery industry associations, major importers, buying offices, etc., in Hong Kong. The Consulate General of India, Hong Kong can also arrange general business

For organising India pavilion, comprehensive support is given.

Bringing all the Indian companies under India pavilion would provide a greater business impact.



meetings with pearls, gems and jewellery traders who are members of other chambers of commerce in Hong Kong. Delegations can interact with government bureaux and agencies to learn about the standards, rules and regulations to be followed when Indian pearls, gems and jewellery products are exported to Hong Kong. Technical details in the two standard regimes between India and Hong Kong can be discussed and options for creating common standards can be explored.

Study

Indian pearls, gems and jewellery exporting organisations can initiate a deeper study for individual products like precious metal jewellery, fashion jewellery, coloured stones etc. These studies can be made comprehensive by getting detailed information about the market for the particular product from various sources in Hong Kong including Government bureaux and agencies, industry associations, importers, buying offices etc. Indian companies wanting to explore the market can also approach the Consulate for essential information like trade figures, updated information on rules and regulations, etc.

Trade and Investment Queries

Indian organisations and companies interested in entering the Hong Kong pearls, gems and jewellery market can make use of the Consulate’s trade matching services. Consulate General of India can provide a list of matching business contacts in the Hong Kong pearls, gems and jewellery sector, including telephone, fax and email details. In case of organisations, this can be circulated among the members of the organisation. Information about Indian business organisations and companies wanting to find

partners in Hong Kong are also circulated to important business organisations in Hong Kong. The Consulate encourages trade queries through email. All queries can be sent to [email protected]

Newsletters

Indian pearls, gems and jewellery export organisations and companies can subscribe to the free e-newsletter published by the Consulate General of India, Hong Kong called “Business Opportunities in Hong Kong”. This newsletter contains business information including economic developments in Hong Kong, trade queries, tender notices, briefs about important commercial associations, forthcoming business conferences and trade fairs, etc. In case of organisations, this valuable business information can be disseminated to the members of the organisations either by emailing the same to their members, or by publishing the details on the organisation’s website. Organisations and companies can subscribe by sending an email to [email protected] or can visit the Consulate’s website to subscribe online (http://www.indianconsulate.org.hk)

Indian pearls, gems and jewellery organisations and companies can utilise “Business Opportunities in India”, another free e-newsletter published to project the capabilities of the associations in catering to the needs of an importer

The Consulate encourages trade queries by email and its website has a unique feature called ‘Online Trade Queries’.



from Hong Kong pearls, gems and jewellery market. In case of organisations, the role and functions of the organisation with full contact details can be provided. This information would be circulated to important business organisations, apart from individual business people of Hong Kong. This newsletter can also be utilised to advertise various trade fairs and business events organised in India for the pearls, gems and jewellery products export. Indian pearls, gems and jewellery export organisations can write to the Consulate General of India, Hong Kong with full details about the event, which can be highlighted in the newsletter. Indian organisations and companies wishing to provide information about the organisation and company can send an email with the details to [email protected]

Business Centre

The Consulate offers many services through its business centre including meeting venue, conference venue, computer, telephone and fax facilities, identifying and hiring of local assistants, interpreters, translators, etc.

Website

The Consulate’s website provides relevant and updated business information, including on India-Hong Kong trade and investment, reports on Hong Kong economy, information on doing business in Hong Kong, opening an office in Hong Kong, etc. Contact details of Indian business organisations in Hong Kong are also given. The website features Online Trade Queries, an interactive database providing information on business contacts in

Hong Kong and India. Business visitors can search business contacts based on name of the product, company, SITC code, importing or exporting, etc. Visitors can also register online so that their information is added to the database. Direct access links for membership database of important commercial organisations in Hong Kong are also provided. Online subscription forms, latest issues and archives, of the Consulate’s e-newsletters are also available. A useful list of important web links to Hong Kong is provided. For further information, please visit:

http://www.indianconsulate.org.hk

Further Information

Extensive list of key contacts and support services both in India and in Hong Kong with reference to Indian export of pearls, gems and jewellery to Hong Kong are given at the end of the report. Apart from the many email addresses and website addresses provided in the report, a separate list of important websites that would be useful for an Indian

pearls, gems and jewellery exporter to Hong Kong market is also appended for ready reference. Consulate General of India would be happy to assist any individual exporter or Organisation in exporting pearls, gems and jewellery to Hong Kong.

The Consulate’s website, with its advanced features, provides relevant and updated business information.

List of key contacts and support services are given at the end of the report.



Opportunities in Mainland China

Hong Kong not only acts as an outward port for pearls, gems and jewellery from Mainland China, but also functions as a gateway to enter Mainland China market. Spending on jewellery alone in the country is rising at an average rate of 10% annually. In 2001, Chinese domestic market for jewellery was about US$9.65 billion. China is

expected to become the world’s leading jewellery consumer and processor by year 2010. China also has a large requirement of industrial diamonds. Some Indian companies have already set up joint ventures in this field and this trend is likely to grow further. With the acceleration of the process of urbanisation, overall improvement in living standards and the increase in purchasing power of the middle class would transform into greater demand for pearls, gems and jewellery products.

Services offered by the Embassy of India, Beijing

Embassy of India, Beijing can provide valuable services to the Indian pearls, gems and jewellery organisations and companies pursuing economic links with Mainland China, including business match-making for trade and investment queries, providing information about relevant exhibitions, arranging meetings for the visiting business delegations, providing resources and inputs for product studies, etc. The Embassy operates a business centre and provides important information through its website http://www.indianembassy.org.cn.

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Chinese domestic market for jewellery was about US$9.65 billion.


1. Introduction Vast and Promising Scope

he Consulate General of India, Hong Kong is happy to bring out “Exporting Pearls, Gems and Jewellery to Hong Kong – A Guidebook”. This publication is meant to assist India trade promotion organisations and

export companies involved in exporting Indian gems and jewellery. According to Standard International Trade Classification (SITC) codes this report covers pearls, precious and semi-precious stones (SITC: 667) and Jewellery (SITC: 897). The following table provides information regarding the products covered along with their Standard International Trade Classification (SITC) codes:

PRODUCTS COVERED

CATEGORY: PEARLS, PRECIOUS AND SEMI-PRECIOUS STONES (SITC: 667) SITC DESCRIPTION 66711 Natural pearls 66712 Cultured pearls, un-worked 66713 Cultured pearls, worked 66721 Diamonds, rough and unsorted 66722 Non-industrial diamonds, un-worked, sorted 66729 Non-industrial diamonds, worked, not mounted 66731 Precious and semi-precious stones, un-worked 66739 Precious and semi - precious stones 66741 Piezo-electric quartz Stones 66742 Synthetic or reconstructed gemstones, un-worked 66749 Synthetic or reconstructed gemstones, NES

CATEGORY: JEWELLERY (SITC: 897) SITC DESCRIPTION 89721 Imitation jewellery of base metal 89729 Imitation jewellery of other non-precious materials 89731 Articles of jewellery, of precious metal 89732 Goldsmiths’ and silversmiths’ wares, precious metal 89733 Articles of pearls, precious or semi-precious stones 89741 Platinum wire or grill catalysts 89749 Other articles of precious metal

This report aims to provide an overview of Hong Kong’s pearls, gems and jewellery market and the present position of India’s exports to this market under these categories. This report also attempts to cover India’s potential in the pearls, gems and jewellery exports, especially in the areas relevant to Hong Kong’s pearls, gems and jewellery market. It analyses India’s present position vis-à-vis major suppliers to Hong Kong’s pearls, gems and jewellery market. Key contacts and support services in India are given. This would provide the essential first step for Indian exporters to contact the relevant organisation in India. In addition, details about market entry opportunities in India are also given. Moreover, key contacts and support services in Hong Kong have been provided. These include list of important importers of the commodities covered under the report. Moreover, a

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detailed section on market entry opportunities in Hong Kong is also given. Sections on Mainland China have been included.

We are confident that this report would offer good opportunity for Indian organisations and companies to take the first step towards their exploration into the Hong Kong pearls, gems and jewellery market or to enhance their existing pearls, gems and jewellery trade related operations with Hong Kong.

We have included a ‘Reader Evaluation Form’ at the end of the report. Kindly provide your feedback to us, which would help us in fine-tuning our future reports to suit your needs.

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2. Hong Kong Import Scope Hong Kong Economy Hong Kong: Basic Facts Hong Kong Market Market Dynamics

2.1 Hong Kong Economy

ong Kong is one of the top ten trading economies in the world with an annual trade of more than US$400 billion. It has the world's second highest per capita holding of foreign currency. It is the second largest

source of outward foreign direct investment in Asia. It has the world's fifth largest foreign exchange reserves holding. It is the world's ninth largest (sixth, if EU countries are regarded as one entity) trading economy and the world's ninth largest exporter of commercial services. Hong Kong has the world's busiest airport in terms of international cargoes and the world's busiest container port. It is Asia's largest gold bullion market, the fourth largest in the world. Hong Kong’s stock exchange is Asia's second largest stock market, the 9th largest in the world. It is also Asia's third largest foreign exchange market in terms of turnover.

Changing Structure of Economy

Hong Kong is also a major re-export centre for the Asia-Pacific region and a premier trade hub for intra-Asian trade, as well as trade between the East and the West and between the Mainland China and the rest of the world. Although some domestic industries, notably electronics, have continued to expand over the past decade, since the early 1980s a large share of Hong Kong manufacturing capacity has been shifted over the border into Mainland China in

order to take advantage of lower operating costs. The relative decline in Hong Kong’s manufacturing sector has been accompanied by the rapid development of its service industries, leading to growth in service exports. However, in general, growth in merchandise exports outpaced growth in service exports, due to the rapid growth in re-export business, resulting from the export boom in the Pearl River Delta and the increase in indirect trade through Hong Kong between China and other countries.

Regional Hub

Hong Kong is also a regional leader in logistics and trade-supporting services, such as product testing and inspection, arbitration and mediation, trade finance

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A large share of Hong Kong manufacturing capacity has been shifted over the border into Mainland China.



documentation and insurance. As China liberalises its markets due to its WTO membership commitments, Hong Kong firms are increasingly active in connecting suppliers in other countries with consumers in the Chinese Mainland and elsewhere in Asia. Hong Kong is the leading financial centre of Asia and is one of the top sources of outward direct foreign investment in Asia.

‘One Country – Two Systems’

Hong Kong remains a separate economic entity under the One Country – Two Systems policy. The Basic Law guarantees that Hong Kong will retain its free trade, free-enterprise environment for at least 50 years. Economic policy in post-handover Hong Kong continues so far on the same ‘positive non-interventionist’ lines as under British

administration. It has maintained its simple-and-low tax system and its own currency. The Hong Kong dollar continues to be backed by a 100% reserve fund. The Hong Kong dollar remains convertible and exchange controls have not been imposed; the free flow of capital into and out of Hong Kong is safeguarded. Hong Kong continues as a separate Customs territory distinct from Mainland China and trade with Mainland China is treated as part of the foreign trade. Hong Kong continues as a free port with its own trade policy while Mainland China is a tariff economy. Hong Kong remains a separate member of the major international economic organisations, such as the World Trade Organisation (WTO), World Customs Organisation (WCO) and the Asia-Pacific Economic Cooperation (APEC) forum, etc.

2.2 Hong Kong: Basic Facts

ECONOMIC GROWTH

GDP: US$163 billion (2002) GDP Per Capita: US$24,011 (2002) Total exports to the World: US$200 billion (2002) Re-exports to the World: US$183 billion (2002) Total imports from the World: US$208 billion (2002)

AREA

Total Area: 1100 km2 GDP BY ECONOMIC ACTIVITY

Economic Activity Contribution to GDP Agriculture and fishing 0.1 Industry 14.3 Services 85.6

CHANGE IN THE CONSUMER PRICE INDICES

2002 -3 REGIONAL OPERATIONS IN HONG KONG

(Set up by companies incorporated outside HK) No. of companies that are regional headquarters 1996: 816; 2002: 948 Number of companies that are regional offices 1996: 1,491; 2002: 2,171

BEST LENDING RATE (PERIOD AVERAGE)

2002 5.11 AIR MOVEMENTS

206 677 flights; 33.5 million passengers, 2.5 MT freight (2002) SHIPPING

Container throughput: 19 million TEUs (2002) POPULATION

6.77 million (as at mid-2002) NATIONALITIES

Predominantly of Chinese descent 95% Total foreign passport holders (end 2001) 526510

Hong Kong’s trade with Mainland China is treated as part of the foreign trade.



2.3 Hong Kong Market

Market Overview

Hong Kong imports over US$6 billion worth of pearls, gems and jewellery annually. Hong Kong's imports in the sector grew from US$4.5 billion in 1999 (+31.3%) to US$5.7 billion in 2000 (+25.5%). There was a slight dip during 2001, mainly due to the impact of September 11, during which Hong Kong's imports declined by -6% to reach US$5.3 billion. However, in 2002, Hong Kong's imports grew by +18.8% to reach US$6.3 billion.

Hong Kong exports over US$5 billion worth of pearls, gems and jewellery annually. Hong Kong's exports in the sector grew from US$3.5 billion in 1999 (+26.8%) to US$4.6 billion in 2000 (+31%). Again, due to the impact of September 11, Hong Kong's exports suffered heavily declining from +31% to -4.2% in 2001 and the value of its exports reached US$4.4 billion. However, in 2002, Hong

Kong's exports grew by +22.1% and reached US$5.4 billion.

Hong Kong re-exports over US$4.5 billion worth of pearls, gems and jewellery annually. Hong Kong's re-exports grew from US$2.8 billion in 1999 (+33.3%) to US$3.8 billion in 2000 (+34.5%). After a limited decline of - 1% during 2001, during which Hong Kong's re-exports reached the value of US$3.77 billion, it again grew by +24.8% in 2002, to reach the value of US$4.7 billion.

As seen from above, Hong Kong being a major trading hub, its imports, exports and re-exports are largely in sync with each other.

Hong Kong is the second largest exporter of precious jewellery in the world. However, about 3/4th of its precious jewellery exports are in fact re-exports. The value of Hong Kong’s annual imports of precious jewellery is reaching US$1.5 billion. Similarly, out of Hong Kong’s annual exports of pearls and gems of US$2.96 billion, 99% are in fact re-exports, with the value of US$2.92 billion. Hong Kong is one of the leading production centres of pure gold items and jade jewellery. It is also evolving into a leading trading and distribution centre for pearls in the recent years. Hong Kong is the leading exporter of imitation jewellery trade in the world.

However, it is to be noted that offshore trade is not being captured by the ordinary trade figures of Hong Kong’s foreign trade, the statistics do not necessarily reflect the export business managed by Hong Kong companies.

Import of jewellery to Hong Kong is not subject to import regulations. Application of import licence is not required. The Hong Kong Special Administrative Region of the People's Republic of China (HKSAR of the PRC) is a free port and does not levy any Customs tariff on imports. There is also no tariff quota or surcharge. There is no value added or general services taxes either. Excise duties are levied on only four types of goods irrespective of whether they

Out of Hong Kong’s US$5.4 billion imports, US$4.7 were actually re-exports.



are imported or locally manufactured. These goods are liquors, tobacco, hydrocarbon oil and methyl alcohol.

Product Overview

Pearls and Gems

Pearls, precious and semi-precious stones formed 77.3% of Hong Kong’s total imports in 2002 under the pearls, gems and jewellery sector. During this period, the value of Hong Kong’s total imports of pearls and gems was US$4,876 million, which saw a growth of +19.7%. It is to be noted that during the same period, the value of Hong Kong’s re-exports under this category was US$2,924 million (+27.3%), forming 99% of its exports, which were valued at US$2,964 million (+26.3%).

Jewellery

In 2002, the value of Hong Kong’s imports of jewellery was US$1,435 million, which saw a growth of +16.1% and formed 22.7% of Hong Kong’s total intake of pearls, gems and jewellery. During the same period, Hong Kong exported US$2,442 million worth of products under this category (+17.4%), of which US$1,781 million were re-exports (+20.9%). Of the products produced in Hong Kong, the gem-set jewellery is the most popular one, particularly diamonds set in 14K or 18K gold.

2.4 Market Dynamics

New Opportunities

China’s entry into the WTO comes with its commitment to lower the import tariff on most finished precious-jewellery in phases. Tariffs on precious jewellery have been reduced from a range of 30-38.75% to 26.7 to 35% effective from 1st January 2003. Import tariffs for diamonds have been shifted but the trade is now required to go through the customs located inside the Shanghai Diamond Exchange, which opened in October 2000. The Shanghai Gold Exchange, opened in October 2002, introduced market prices to the Mainland’s gold trade for producers and wholesalers, marking the early steps to liberalisation of China’s gold market. The following table provides information about China’s tariff reduction schedule for jewellery imports.

CHINA'S TARIFFS REDUCTION SCHEDULE FOR JEWELLERY IMPORTS

COMMITTED RATE (%) UNDER WTO AGREEMENT HS CODE DESCRIPTION

RATE (%) AT DATE OF ACCESSION 2002 2003 2004 2005

71131100 Jewellery & parts thereof, of silver 33.3 30 26.7 23.3 2071131910 Jewellery & parts thereof, of gold 33.3 30 26.7 23.3 2071131990 Jewellery & parts thereof, of other precious metal 36.7 35 35 35 35

71132000 Jewellery & parts thereof, of base metal clad with precious metal

36.7 35 35 35 35

71141100 Silversmiths' wares & parts thereof 36.7 35 35 35 35

71141900 Goldsmiths' wares & parts thereof, of precious metal

36.7 35 35 35 35

71142000 Gold/silversmiths' wares & parts thereof, of base metal clad with precious metal

36.7 35 35 35 35

71161000 Articles of natural or cultured pearls 42.5 38.75 35 35 3571162000 Articles of precious or semi-precious stones 36.7 35 35 35 35



Due to the fast emerging Chinese pearl industry and the increased demand Hong Kong is emerging as a leading trading and distribution centre for pearls in recent years. Hong Kong, with its global experience as a trading hub has established new links and enhanced its existing links to expand its markets for pearl trade. Indian exporters of pearl and articles of pearl can use Hong Kong also as one of their routes to reach out to new markets and buyers around the world.

Production Aspects

Recent technological development allows massive production of jewellery products with good quality and competitive prices. While the jewellery industry around the world remains basically a handicraft industry, a number of larger establishments have made use of sophisticated and automated production equipments. Advanced production

techniques, such as eletroforming, are integrated with handicraft skills to enhance their efficiency.

Although value-added processes are still retained in Hong Kong, manufacturing processes are increasingly being shifted to Mainland China, mainly Shenzhen and Panyu. Industrial observers point out that manufacturing processes with less stringent quality requirements are increasingly being shifted to Mainland China, while the more delicate, higher value-added processes largely remain in Hong Kong.

According to a survey conducted by Oracle Market Research for Hong Kong Trade Development Council, there are currently about five in-house designers in every Hong Kong jewellery factory, compared to about two in 2001-02. Hong Kong manufacturers expect the number to rise to about six designers per factory in three years’ time. The focus on design in the production process is getting accentuated.

Product Trends

Increasingly more players in the pearls, gems and jewellery sector make use of computer aided design (CAD) technology to shorten the time cycle for product development. Computer numerically controlled (CNC) machine tools are also increasingly employed by many manufacturers to meet the stringent needs of quality control and standard specifications. Suppliers with these facilities would be able to match and deliver the specifications to trading hubs like Hong Kong in a smoother way.

Jewellery designs have been increasingly influenced by the apparel fashion. Apart from the luxury market of feminine and romantic pieces of jewellery, the demand is growing for jewellery that is wearable with most of the modern dresses, including jeans, etc. The growth of youngsters as buyers in the market heightens this trend.

While fashion decides the jewellery design, sometimes jewellery itself becomes part of fashion. This trend is on the rise. Large fashion retail chains, for example, Chanel in Europe are offering fashion jewellery as accessories, complementing

Advanced production techniques are integrated with handicraft skills.



their new lines of fashion. Such developments would contribute to an increase demand for elegant and romantic diamonds, which are expected to top the list of the jewellery buyers while semi-precious stones and colour crystals targeting the minimum of lower-end scheme are also likely to move fast. Turquoise and coral accessories are also expected to rise in the fashion scale.

Innovations are always in demand in the gems and jewellery industry. Trends like two-tone jewellery are offering new look and feel for the consumers. Typically a blend of yellow and white gold, two-tone jewellery is seen in the market offering modern and sophisticated look. Due to increased global industry of gems and jewellery market and the need for global competitiveness, trading hubs like Hong Kong expect their suppliers to have and practice qualities like prompt delivery, innovative designs, impeccable artisanship, quality assurance instead of quality control, flexible production, reasonable prices, etc.

Marketing Channels

On marketing and distribution, jewellery manufacturers are building up individual branded jewellery or having licensing agreements. This has created a necessity for the jewellery manufacturers to move into distribution also. Separately, a rapid development of on-line shopping, though yet to achieve the critical mass, is also noteworthy. The concept of brick-and-click, combing direct sales outlets with on-line product showcasing is expected to continue at least for the coming few years.

Though Hong Kong’s jewellery scene is largely oriented towards export trade, the local retain and distribution channels are also gaining importance. This is mainly helped by the tourism industry. The Hong Kong Tourist Board estimated that tourist expenditure on jewellery amounted to about US$1 billion in 2001, of which two-thirds were attributed to visitors from Mainland China. Hong Kong companies with own brand names have started entering into Mainland Chinese market by opening their retail centres also.

Like other industrial sectors, the trend of consolidation also happens in the jewellery industry. This trend is noticeable globally including in the Western markets. For example, in the USA, big players such as Wal-Mart, Target, Costco, K-Mart, etc have captured a bigger share of consumer

spending. A recent survey by Search and Markets Limited reported that 20% of fine jewellery shoppers in the USA purchase in these outlets. This trend changes the dynamics of the market by providing stronger bargaining power to these players against the individual suppliers. Trading hubs like Hong Kong are continuously under pressure to find jewellery products at competitive price and world-class quality to win buyers’ orders.

Standards and Rules

The trading of ‘conflict’ diamonds is a new concern for the gems and jewellery industry. The UN defines the conflict diamonds as diamonds that originate from areas controlled by forces and factions opposed to legitimate and internationally recognised governments and are used to fund the militia in opposition to those governments. Conflict diamonds, also called as ‘blood diamonds’, originated in

Consolidation provides greater bargaining power to buying offices.



several war-torn African countries, including Angola, Congo, Sierra Leone, etc. Several non-governmental organisations have called for the attention to the fact that diamonds from these sources might have been sold through illegal channels to finance civil wars and conflicts in these regions. In response, a World Diamond Congress was held in Antwerp on 17 July 2000 in which The World Federation of Diamond Bourses and The International Diamond Manufacturer Association (IDMA) passed a 9-point plan in line with the UN Resolution to clamp down on conflict diamonds. This includes standardisation of certificate amongst the diamond exporting countries, transparency, auditing and monitoring of the regime and new legislation against those who fail to comply, etc.

Hong Kong has introduced the certification scheme since 2nd January 2003. Accordingly, Indian companies exporting or importing rough diamonds to Hong Kong should do so with Hong Kong companies, which are registered with the Trade and Industry Department. These Hong Kong companies are required to obtain Kimberley Process Certificates (KPC) issued by the Trade and Industry Department before the import and export of

rough diamonds. However, Indian export of diamonds is largely concentrated in polished diamonds and hence to that extent Indian export of diamonds to Hong Kong is insulated from the teething trouble of inspection regime. Restriction of conflict diamonds may at the most influence the price of rough diamonds in the market and this may have an indirect impact on our polished diamond prices in the world market as India imports 1/3 of the global roughs that go into making polished diamonds. Alternatively, India can look to buying more roughs from other sources. Hence, one can safely conclude that prohibition of ‘Conflict Diamonds’ is unlikely to disrupt Indian diamond trade, at least in the immediate future.

Environmental and health concerns continue to be important factors in gems and jewellery trade. In the EU, imports of jewellery containing nickel, which could cause allergic reactions when in contact with skin, have been banned. Fashion jewellery products using other materials are in need as replacements to the EU market in this regard.

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Hong Kong companies have to obtain Kimberley Process Certificates for dealing with rough diamonds.


3. India’s Export Scope Major Exporters to Hong Kong India’s Exports to Hong Kong India’s Share and Future Scope

3.1 Major Exporters to Hong Kong

ong Kong’s Pearls, Gems and Jewellery market is dominated by a few players. Here details about major suppliers under different categories with details of each item are given. All figures under this section pertain

to 2002 unless otherwise specified.

Pearls and Gems

Pearls

Natural Pearls

Hong Kong’s imports under natural pearls (SITC: 66711) is on the decline. In 2002, the value of Hong Kong’s imports under this item was US$179,000 (-93.7%). Japan is the leading exporter with 49% market share (US$88,000, growth –94.5%), followed by Switzerland (US$51,000, growth -88.7%, share 28.7%), the USA (US$22,000, growth – 94.3%, share 12.3%).

Cultured Pearls, Un-worked

Indonesia is the leading exporter of cultured pearls, un-worked (SITC: 66712) to Hong Kong. It enjoys 47.6% share in the Hong Kong’s market with exports worth US$40 million (+20.3%). This is followed by Australia/Oceania (US$13 million, growth +100.4%, share 15.6%), China (US$8 million, growth +45.9%, share 9.2%),

the USA (US$5 million, growth +41.6%, share 6.6%) and Japan (US$5 million, growth +-35.8%, growth 6.3%)

Cultured Pearls, Worked

Australia is the leading exporter of cultured pearls, worked (SITC 66713) to Hong Kong’s market, which enjoys 34.3% share in the market (US$52 million, growth –4.1%). This is followed by Japan (US$41 million, growth –36.8%, share 27.2%), Australia / Oceania (US$22 million, growth +26.0%, share 14.7%), China (US$20 million, growth +15.5%, share 13.1%) and the USA (US$7 million, growth –33.9%, share 4.4%)

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Indonesia enjoys 47.6% share in Hong Kong’s import of cultured pearls, un-worked.



Diamonds

Diamonds, Rough, Unsorted

Belgium is the leading exporter of diamonds, rough, unsorted (SITC 66721) which enjoys 86% share in Hong Kong’s market. The value of Belgium’s export under this item reached US$11.5 million (+54.3%) followed by Israel (US$0.7 million, growth +392.9%, share 5.4%), Singapore (US$0.6 million, share 4.8%. Singapore entered Hong Kong’s market under this item only in 2002). India is the fourth largest exporter of this item to Hong Kong (US$0.3 million, growth +2.4%, share 2.4%), followed by the USA (US$0.2 million, growth +5%, share 1.4%)

Non-Industrial Sorted Diamonds, Un-worked

UAE is the leading exporter of non-Industrial sorted diamonds, un-worked (SITC 66722), which enjoys 29.4% share in Hong Kong’s market (US$236 million, growth +60.4%). This is followed by Israel (US$192 million, growth +42.3%, share 23.9%), Belgium (US$185 million, growth +19.8%, share 23.0%), United Kingdom (US$72 million, growth 32.0%, share 9.0%) and India (US$61 million, growth –30.6%, share 7.6%).

Non-Industrial Diamonds, Worked, Not Mounted

India is the leading exporter of non-Industrial diamonds, worked, not mounted (SITC 66729) to Hong Kong, which enjoys 48.4% share in the market with the value of exports reaching US$1738 million (+14.1%). This is followed by Israel (US$541 million, growth +28.5%, share 15.0%), Belgium (US$463 million, growth +44.5%, share 12.9%), the USA (US$413 million, growth +9.9%, share 11.5%)

and China (US$135 million, growth +23.3%, share 3.8%).

Coloured Stones

Precious & Semi- Precious Stones, Un-worked

Myanmar is the leading exporter of precious & semi- precious stones, un-worked (SITC 66731) to Hong Kong, which enjoys 18.5% share in the market with the value of exports reaching US$8 million (+46.1%). This is followed by the USA (US$7 million, growth +41.6%, share 17.0%), South Africa (US$5 million, growth +37.9%, share 12.3%), Brazil (US$5 million, growth –18.5%, share 11.0%) and Zambia (US$3 million, growth +109.2%, share 6.0%).

Precious & Semi-Precious Stones, Worked

USA is the leading exporter of precious & semi-precious stones, worked (SITC 66739) to Hong Kong, which enjoys 29.6% share in the market with the value of exports reaching US$45 million (+36.0%). This is followed by Thailand (US$31 million, growth +22.3%, share 20.3%), India (US$24 million, growth +18.7%, share 15.9%), China (US$12 million, growth 37.8%, share 8.2%) and Switzerland (US$9 million, growth –27.7%, share 5.7%).

India is the leading exporter of non-Industrial diamonds to Hong Kong with 48.4% share.



Piezo-Electric Quartz Stones

Taiwan is the leading exporter of piezo-electric quartz stones (SITC 66741) to Hong Kong which enjoys 76.1% share in the market with the value of exports reaching US$8 million (-6.9%). This is followed by China (US$2 million, growth +139.1%, share 20.8%), the USA (US$0. 1million, growth –17.8%, share 1.3%), Russian Federation (US$0.08 million, growth –27.7%, share 0.7%) and Germany (US$0.06 million, growth +88.2%, share 0.6%).

Synthetic or Reconstructed Gemstones, Un-worked

Russian Federation is the leading exporter of synthetic or reconstructed gemstones, un-worked (SITC 66742) to Hong Kong, which enjoys 25.7% share in the market with the value of exports reaching US$1 million (+61.7%). This is followed by Japan (US$1 million, growth +80.2%, share 19.7%), Taiwan (US$1 million, growth +8.5%, share 14.1%), China (US$0.9 million, growth 121.3%, share 13.2%) and France (US$0.5 million, growth –11.2%, share 7.3%)

Synthetic or Reconstructed Gemstones

China is the leading exporter of synthetic or reconstructed gemstones, NES (SITC 66749) to Hong Kong which enjoys 44.7% share in the market with the value of exports reaching US$9 million (+3.3%), This is followed by Switzerland (US$8 million, growth –3.3%, share 36.9%), the USA (US$2 million, growth 0.5%, share 9.5%), Thailand (US$0.7 million, growth +67.0%, share 3.5%) and Singapore (US$0.4 million, growth –47.2%, share 2.2%).

Jewellery

Imitation Jewellery

Imitation Jewellery of Base Metal

China is the leading exporter of imitation jewellery of base metal (SITC: 89721) to Hong Kong which enjoys 74.9% share in the market with the value of exports reaching US$117 million (+11.0%), Macau SAR (US$10 million, growth +43.9%, share 6.1%), Germany (US$8 million, growth +67.4%, share 5.3%), the USA ( US$4 million, growth –0.7%, share 2.7%) and Singapore (US$3 million, substantial growth above 1000%, share 2.2%).

Imitation Jewellery of Other Non-Precious Materials

China is the leading exporter of imitation jewellery of other non-precious materials (SITC: 89729) to Hong Kong which enjoys 80.8% share in the market with the value of exports reaching US$23 million (-13.1%). This is followed by France (US$2 million, growth +155.2%, share 6.4%), the USA (US$0.9million, growth –43.7%, share 3.1%), Italy (US$0.4 million, growth –12.8%, share 1.4%) and Thailand (US$0.3 million, growth +80.7%, share 1.2%).



Precious Metal Jewellery

Articles of Jewellery, of Precio us Metal

China is the leading exporter of articles of jewellery, of precious metal (SITC: 89731) to Hong Kong which enjoys 29.6% share in the market with the value of exports reaching US$359 million (+19.2%). This is followed by Italy (US$241million, growth +19.1%, share 19.9%), the USA (US$211 million, growth +25.6%, share 17.4%), Switzerland (US$134 million, growth 31.1%, share 11.1%) and France (US$43 million, growth +61.7%, share 3.6%).

Goldsmiths’ and Silversmith’s Wares, Precious Metal

China is the leading exporter of goldsmiths’ and silversmith’s wares, precious metal (SITC: 89732) to Hong Kong which enjoys 74.0% share in the market with the value of exports reaching US$7 million (-49.9%). This is followed by United Kingdom (US$1 million, growth –33.8%, share 10.1%), Italy (US$0.5 million, growth –57.9%, share 4.8%), Switzerland (US$0.4 million, growth –63.3%, share 4.3%) and Germany (US$0.2 million, growth –0.7%, share 2.4%).

Jewellery Articles

Articles of Pearls, Precious or Semi-Precious Stones

China enjoys a dominant share of 90.5% in Hong Kong’s total intake under articles of pearls, precious or semi-precious stones (SITC: 89733). It supplies products worth US$14.2 million (+29.8%). This is followed by the USA (US$0.6 million, growth –76.9%, share 3.7%), Taiwan

(US$0.2 million, growth +109.4%, share 1.4%), Germany (US$0.1 million, growth –57.7%, share 1.1%) and Japan (US$0.1 million, growth –74.4%, share 0.8%).

Platinum Wire or Grill Catalysts

Hong Kong’s market under platinum wire or grill catalysts (SITC: 89741) is rather limited and it declined from US$91,000 in 2001 (+374.8%) to US$25,000 in 2002 (-72.5%). The newcomer Austria captured 75.8% of the market with its US$19,000 exports. This is followed by Japan (US$4,000, growth –92.6%, share 16.1%), the USA (US$2,000, growth –0.9%, share 8.1%).

Other Articles of Precious Metal

Japan is the leading exporter of other articles of precious metal (SITC: 89749) to Hong Kong which enjoys 44.8% share in the market with the value of exports reaching US$4 million, (+78.3%). This is followed by Switzerland (US$2 million, growth +53.6%, share 21.4%), the USA (US$1 million, growth +17.0%, share 12.3%), Taiwan

(US$1 million, growth +350.4%, share 12.2%) and United Kingdom (US$0.2 million, growth –52.4%, share 3.3%).

China enjoys 90.5% in Hong Kong’s import under this item.

Japan is the leading exporter of other articles of precious metal to Hong Kong.



3.2 India’s Exports to Hong Kong

India’s export of Gems and Jewellery to Hong Kong market has grown from US$1,563 million in 1999 to US$1,854 million, with a growth rate of +11.7%, in 2002.

The gems and jewellery trade between India and Hong Kong is vibrant. Hong Kong is the second largest export destination of Indian diamonds and it takes 27% of Indian exports in this category, valued at US$1,600 million. About 10% of rough diamonds imported by India are also routed through Hong Kong, valued at US$389 million during 2001-02. Hong Kong is again the second largest export destination, with about 14% to 15% share, of India’s coloured gemstones, valued at about US$15 million. Hong Kong is also the fifth largest export destination of Indian gold jewellery, which reached US$38 million during 2000-01, accounting for about 3% share. The following table provides information about India’s gems and jewellery export destinations during 2001-02:


COUNTRIES DIAMONDS TOTAL GEMS & JEWELLERY USA 1972.71 2750.87 Hong Kong 1600.11 1638.36 Belgium 842.35 845.01 Japan 329.22 362.31 Israel 263.85 265.46


Hong Kong’s total import of pearls, gems and jewellery has reached US$6,310 million in 2002. Hence, India’s share in Hong Kong’s market is 29% (US$1,854 million). However, India’s export basket under this sector is lop-sided with only a few products contributing majority of the value. Except for one single item, namely, non-industrial diamonds, worked, not mounted (SITC: 66729), India’s share in almost all other products is meagre. This product alone contributed 94% of India’s total export value of

pearls, gems and jewellery to Hong Kong in 2002 (US$1,738 million). In 2002, the value of India’s exports to Hong Kong under pearls and gems was US$1,825 million and that of jewellery was US$29 million (98:2).

Hence, India’s export basket needs to be more diversified and balanced. India is still known mainly as the leading exporter of cut and polished diamonds in the Hong Kong market. However, India’s strengths in the areas of jewellery are yet to be highlighted in the market, which is one of the

largest exporters of precious jewellery in the world. Since India already has made inroads into this market with limited range of products, Indian exporters can also concentrate on expanding their product range.

The following table provides information regarding Hong Kong’s imports from the world and from India under this sector in the past few years.

One single product alone contributes 94% of India’s total export value to Hong Kong under the pearls, gems and jewellery sector.

India’s export basket needs to be more diversified and balanced.



HONG KONG’S IMPORT OF PEARLS, GEMS AND JEWELLERY FROM THE WORLD AND INDIA (US$ Million)

YEAR TOTAL IMPORTS IMPORTS FROM INDIA VALUE GROWTH VALUE GROWTH

1999 3,438 +39.0% 1,537 +38.8% 2000 4,389 +27.6% 1,905 +24.0% 2001 4,075 -7.2% 1,634 -14.2% 2002 4,875 +19.7% 1,825 +11.7%

(Source: Census and Statistical Department, HKSAR)

3.3 India’s Share and Future Scope

This section provides information about Hong Kong’s imports, various categories of pearls, gems and jewellery products and India’s share under these categories. All figures pertain to 2002 unless otherwise specified.

Pearls and Gems

Pearls, precious and semi-precious stones (SITC 667) category forms 77.3% of Hong Kong’s total imports under pearls, gems and jewellery sector. While Hong Kong imported products worth US$4,876 million (+19.7%) under pearls, precious and semi-precious stones category, it exported US$2,964 million (+26.3%), of which US$2,924 million (+27.3%) were re-exports.

India is the single largest exporter of pearls, precious and semi-precious stones to Hong Kong. The value of India’s export reached US$1,825 million (+11.7%) in 2002 accounting for 37.4% of the market share. The growth pattern of Indian exports to Hong Kong under this category matched the fluctuations experienced by the Hong Kong market. The following table provides information regarding India’s share in Hong Kong’s total imports along with the major exporters to this market:

INDIA’S POSITION IN HONG KONG’S IMPORT OF PEARLS AND GEMS (SITC: 667) (US$ Million)

COUNTRY 2001 2002 VALUE SHARE GROWTH VALUE SHARE GROWTH

World 4075 100 -7.2 4876 100 +19.7 India 1634 40.1 -14.2 1825 37.4 +11.7 Israel 556 13.6 -15.3 733 15 +31.9 Belgium 484 11.9 +8.0 661 13.6 +36.7 USA 433 10.6 -18.1 482 9.9 +11.1 UAE 175 4.3 +131.5 288 5.9 +65.0 (Source: Census and Statistical Department, HKSAR)

Hence, India's export of pearls and gems contributes an overwhelming 98.4% of India’s total export of pearls, gems and jewellery to Hong Kong, leaving less than 2% for India’s export of jewellery to Hong Kong.

Hong Kong market shows that the trading of natural pearls (SITC: 66711) is declining. Hong Kong’s import of this item has declined from US$6,251 million in 1999 to US$179 million in 2002. The growth rates was +15.2% in 1999, +65.6% in 2000, -72.4% in 2001 and -93.7% in 2002. Even the growth of un-worked cultured pearl (SITC: 66712) is also not adequately compensating the decline, though it grew from US$74 million in 1999 to US$83 million in 2002. India’s export of un-worked cultured pearls made a small beginning in 2000



(US$12,000) and grew to US$170,000 in 2001. It again declined and reached US$82,000 in 2002.

India’s export of worked cultured pearls grew by +89.5% in 2002 and reached US$112,000, yet it enjoys only 0.1% of Hong Kong’s total market share under this item. India is the fourth largest exporter of unsorted rough diamonds (SITC: 66721) to Hong Kong, but the value is only

US$322,000 (growth +2.4%, share 2.4%). India’s export of non-industrial sorted diamonds, un-worked (SITC: 66722) grew from US$13 million (share 3.5%) in 1999 to US$61 million (share 7.6%) in 2002. It is to be noted that UAE, a new entrant under this sector just two years ago, has gained 29.4% of the market in 2002 with its exports reaching US$236 million.

India is the single largest exporter of non-industrial worked diamonds, not mounted (SITC: 66729), to the Hong Kong’s market (US$1,738 million, +14.1%). The second largest exporter holds 15% of the market, which India holds 48.4% of the market.

India is the tenth most important exporter of precious and semi-precious stones, un-worked (SITC: 66731). The value of Indian exports reached US$1,226 in 2002 (-4.8%, share 2.9%). India is the third largest exporter of precious and semi-precious stones, worked (SITC: 66739) to the Hong Kong’s market and its exports reached US$24 million in 2002 (+18.7%, share 15.9%).

India made a very small beginning in 2002 in the export of piezo-electric quartz stones (SITC: 66741) to Hong Kong by exporting US$3,000 worth of products. India’s export of synthetic or reconstructed gemstones, un-worked (SITC: 66742) faced a decline in 2002 (US$32,000, -88.5%, share 0.5%), like the exports of other synthetic or reconstructed

gemstones (SITC: 66749), with an export value of US$86,000 (-47%, share 0.4%). The following table provides information regarding India’s exports under the category of pearls and gems (SITC: 667) to Hong Kong in 2002:

INDIA’S EXPORT OF PEARLS AND GEMS TO HONG KONG 2002 (US$ thousand)

SITC DESCRIPTION VALUE GROWTH 66711 Natural pearls - - 66712 Cultured pearls, un-worked 80 -52.3 66713 Cultured pearls, worked 100 +89.5 66721 Diamonds, rough and unsorted 300 +2.4 66722 Non-industrial diamonds, un-worked, sorted 61000 -30.6 66729 Non-industrial diamonds, worked, not mounted 1738000 +14.1 66731 Precious and semi-precious stones, un-worked 1000 -4.8 66739 Precious and semi - precious stones 24000 +18.7 66741 Piezo-electric quartz Stones 3 Infinity 66742 Synthetic or reconstructed gemstones, un-worked 30 -88.5 66749 Synthetic or reconstructed gemstones, NES 90 -47.0 Total (US$1825 million) 1,824,603 +11.7%

(Source: Census and Statistical Department, HKSAR)

India’s export of worked cultured pearls grew by +89.5 in 2002

India made a very small beginning in 2002 in the export of piezo-electric quartz stones.



Conflict Diamonds and India

As explained under Part 2: Hong Kong’s Import Scope, ‘Conflict Diamonds’ are one of the serious concerns of global diamond trade. India and Hong Kong are both signatories under this scheme and have resolved to monitor their diamond trade to avoid assisting conflict diamond traders.

Indian export of diamonds is largely concentrated in polished diamonds and hence to that extent Indian export of diamonds to Hong Kong is insulated from the teething trouble of inspection regime. Restriction of conflict diamonds may at the most influence the price of rough diamonds in the market and this may have an indirect impact on our polished diamond prices in the world market as India imports 1/3 of the global roughs that go into making polished diamonds. Alternatively, India can look to

buying more roughs from other sources. Hence, one can safely conclude that prohibition of ‘Conflict Diamonds’ is unlikely to disrupt Indian diamond trade, at least in the immediate future.

Jewellery

India exported products worth US$29 million under the jewellery category (SITC 897). Though Indian exports grew by +14.3%, India enjoys only 2%of the Hong Kong’s market share. However, it is to be noted that Indian exports under this category have registered a positive growth after a prolonged decline. In 1999, the value of Indian exports was US$27 million (-46.7%), followed by US$25.6 million in 2000 (-4.5%) and US$25.5 million (-0.5%) in 2001. The following table provides an overview of Hong Kong’s imports under jewellery category giving a perspective of India’s position in this regard.

INDIA’S POSITION IN HONG KONG’S IMPORT OF JEWELLERY (SITC: 897) (US$ Million)

COUNTRY 2001 2002 Value Share Growth Value Share Growth

World 1,236 100.0% -1.9% 1,435 100.0% +16.1% China 459 37.2 +3.0% 522 36.4% +13.5%

Italy 206 16.7 -0.3% 243 17.0 +18.1% USA 177 14,4 +5,6% 218 15.2 +22.9%

Switzerland 107 8.7 -37.2% 138 9.6 +29.4% Japan 39 3.2 -21.3% 49 3.4 +25.8%

France 30 2.5 +115.2% 49 3.4 +60.9% India 25 2.1 -0.5% 29 2.0 +14.3%

United Kingdom 19 1.5 -20.9% 26 1.8 +39.2% Thailand 15 1.3 -5.4% 21 1.5 +37.5%

Singapore 28 2.2 +5.2% 21 1.4 -26.1% (Source: Census and Statistics Department, HKSAR)

China is the leading exporter of jewellery to the Hong Kong market in five out of seven items under this category. India’s export of imitation jewellery (SITC: 89729) saw a sudden reversal in 2000 (the year of peak of India’s total export of gems and jewellery around the world), but has tapered back to 1999 level in 2002. This trend is repeated for goldsmiths’ and silversmiths’ wares, of precious metal

Indian export of diamonds is largely concentrated in polished diamonds and hence it is insulated from the new development.

China is the leading exporter of jewellery to the Hong Kong market in five out of seven items.



(SITC: 89732). However, articles of jewellery, of precious metals (SITC: 89731) showed positive growth after a plateau value of US$25 million during 1999 to 2001, to reach US$29 million, marking a growth of +15.8% in 2002. The following table provides information regarding India’s export items under the Jewellery category (SITC: 897)

INDIA’S EXPORT OF JEWELLERY (US$ thousand)

SITC DESCRIPTION VALUE GROWTH 89721 Imitation jewellery of base metal 40 -29.0 89729 Imitation jewellery of other non-precious materials 40 -39.3 89731 Articles of jewellery, of precious metal 29000 +15.8 89732 Goldsmiths’ and silversmiths’ wares, precious metal 20 -31.4 89733 Articles of pearls, precious or semi-precious stones 70 -77.5 89741 Platinum wire or grill catalysts - - 89749 Other articles of precious metal - - Total 29170 +14.3

(Source: Census and Statistics Department, HKSAR)

Hence, India could concentrate makings its export basket more diversified and balanced. While reinforcing its strengths under the diamond export trade, India could also focus on promoting its capabilities in the jewellery sector. Indian exporters can make use of the Indian community in Hong Kong, of which many are directly involved in the gems and jewellery trade.

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4. Entering the Market Exhibitions Services by the Consulate

his chapter provides information about the ways to enter the Hong Kong pearls, gems and jewellery market and methods of enhancing existing business links in this regard. This will help the Indian pearls, gems and

jewellery organisations and companies pursuing business links with the Hong Kong market.

4.1 Exhibitions

Trade Fairs in Hong Kong

Introduction

Indian pearls, gems and jewellery exporters can make a good beginning to enter the Hong Kong market by participating in pearls, gems and jewellery related Hong Kong exhibitions. It is to be noted that more than 3,000 economy-related conferences and events are organised in Hong Kong. Hong Kong international exhibitions have created a niche as showcases of Asian products to the world. These exhibitions not only cater to the local

Hong Kong traders but also to major buyers from all over the world, including North America, Europe, other Asian countries like Japan, Korea, etc. Hong Kong gems and jewellery exhibitions can also provide an opening to enter Mainland China market, as scores of Mainland China traders and manufacturers visit Hong Kong exhibitions. For example, 21% of the total overseas visitors to Hong Kong International Jewellery Manufacturers Exhibition in 2002 were from Mainland China, overtaking the USA as the largest visiting country. The organisers of the exhibitions in Hong Kong normally welcome buying missions from various markets by providing hospitality. For instance, 30 buying missions, including missions from Australia, Dubai, the USA, Spain and Mexico, visited the Hong Kong Jewellery Show in 2002.

Exhibition Services by the Consulate

Indian pearls, gems and jewellery exporters desiring to participate in these exhibitions can contact the Consulate General of India for updated information about these fairs, including relevance of these exhibitions to their products, track record of the exhibitions regarding visitor profile and turnout, calendar, contact

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China is topping the list of countries sending maximum number of buyers to some of the Hong Kong exhibitions.



details of the organisers, etc. A list of important Hong Kong importers of that particular product can also be provided to facilitate pre-exhibition promotion and meeting arrangements.

For an Indian organisation organising an India pavilion, support is given in terms of identifying stall construction contractors, stall designs, execution and facilities for Indian exhibitors, arranging interpreters, booth assistants, etc.

Reaching Hong Kong Convention and Exhibition Centre

Most of the Hong Kong international exhibitions are held at the Hong Kong Convention and Exhibition Centre (HKCEC). It is located in Wanchai, overlooking the Victoria Harbour. It is connected by covered walkways to adjacent Grand Hyatt Hong Kong and Renaissance Harbour View Hotel. It is at a walkable distance from Wanchai MTR station with an exit marked for HKCEC and is also linked by bus and ferry.

Basic information about select list of fairs in Hong Kong, which can be targeted to promote Indian pearls, gems and jewellery are given below:

Hong Kong International Jewellery Show

Organiser:

Hong Kong Trade Development Council Unit 13, Expo Galleria, Hong Kong Convention & Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong Phone: +852.2240.4145 Fax: +852.2824.0026 Email: [email protected] Web: http://hkjewellery.com

One of the largest jewellery shows in the region, this annual event deals with all kinds of fine jewellery, diamonds, pearls, gems watches and clocks and related jewellery products and services. During its 2003 edition, it attracted 1,186 exhibitors from 30 countries and regions, including 443 overseas exhibitions. India organised Indian pavilion, along with other countries, including Belgium, China, Israel, Italy, Japan, Korea, etc. This show also attracted 20,145 visitors. While the number of visitors from Hong Kong increased by 13.2%, the number of overseas visitors increased by 26.5% to reach 9,639, including 1,368 visitors from Europe, followed by 1,402 from North America.

Hong Kong Jewellery and Watch Fair

Organiser:

CMP Asia Ltd 17/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong Phone: +852.2827.6211 Fax: +852.2827.7831

The Consulate assists in organising India pavilion



Web: http://www.cmpasia.com Email: [email protected]

This bi-annual event, held in June and September every year, is one of the largest jewellery fairs in the world and is claimed to be the biggest jewellery fair in Asia, biggest pearl fair in the world and the second biggest diamond and gemstone fair in the world. This fair features fine jewellery, gemstones, pearls, diamonds, jewellery watches, etc.

The June 2002 edition of the fair attracted 599 exhibitors from 27 countries and regions, including 12 Indian companies. It also attracted 14,324 visitors from 92 countries and regions. Among the exhibitors, 47% offered on fine finished jewellery as their main product, followed by pearls (24%), gemstones (23%) and diamonds (10%). Study of the visitors’ profile shows that 42% of the visitors were jewellery and watch wholesalers and retailers, while 22% were diamond and gemstone traders, followed by jewellery and watch manufacturers (19%), pearl traders and suppliers (13%) and institutes, government bodies and others (4%).

Hong Kong being one of the major centres of global pearl distribution in Asia, this fair attracts some of the world-renowned pearl auctions to be held in association with the fair.

The September 2002 edition attracted 1,700 exhibitors from 45 countries and regions and 30,000 visitors from 100 countries and regions. Among the visitors, 44% were jewellery and watch wholesalers and retailers followed by diamonds and gemstones (23%), jewellery and watch manufacturers (13%), pearls traders and suppliers (10%)

and others (2%).

Many countries and regions organised special pavilions including Belgium, Brazil, France, Germany, Israel, Italy, Japan and Korea, etc.

The organisers of this fair also bring out a widely circulated magazine called Jewellery News Asia. For further information, please contact the circulation department at CMP Asia Ltd address, given above.

Asia’s Fashion and Jewellery Accessories Fair

Organiser:

CMP Asia Ltd 17/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong Phone: +852.2827.6211 Fax: +852.2827.7831 Email: [email protected] Web: http://www.cmpasia.com

The Asia’s Fashion Jewellery and Accessories Fair features fashion jewellery (precious metal-plated jewellery, silver jewellery, crystals, beads, semi-precious

September 2002 edition attracted 1,700 exhibitors and 30,000 visitors.



gemstones, etc.), fashion jewellery materials (loose polished semi-precious stones, beads, minerals, jewellery parts, etc.) and fashion accessories. This bi-annual event is held concurrently with the June and September editions of Hong Kong Jewellery and Watch Fair.

The June edition of Asia’s Fashion Jewellery and Accessories Fair was started in 1998. Its 2002 edition attracted 330 exhibitors and 13,000 visitors. Of the visitors, 30% were importers/exporters, followed by wholesalers

(23%), retailers (23%), manufacturers (18%) and departments/chain stores and others (6%). Many buyers (43%) showed interest in fashion accessories followed by fashion jewellery (41%) and fashion jewellery materials (16%).

The September edition of Asia’s Fashion and Jewellery Accessories Fair is a new addition and will be held from September 2003 onwards.

Hong Kong International Jewellery Manufacturers Exhibition

Organiser:

Hong Kong Jewellery Manufacturers’ Association & Hong Kong Jewellery Express Magazine Unit G, 2/F, Kaiser Estate Phase 2, 51 Man Yue Street Hunghom, Kowloon, Hong Kong Phone: +852.2766.3002 Fax: +852.2362.3647 Email: [email protected] Web: http://www.jewelry.org.hk

This annual event’s 10th edition was held in November 2002. It attracted 184 exhibitors and 8,137 visitors from 55 countries and regions. 21% of the total overseas visitors to Hong Kong International Jewellery Manufacturers Exhibition in 2002 were from Mainland China, overtaking the USA as the largest visiting country.

The exhibition features products including pearls, gems precious metal and fashion jewellery. It offers special focus items like World Chains Expo, Jadeite Centre, Pearl Square, etc.

Market Access Initiative

Indian pearls, gems and jewellery export organisations can provide impetus to the focus on Hong Kong pearls, gems and jewellery market by planning Market Access Initiative’s (MAI) for Indian exporting companies. To participate in pearls, gems and jewellery trade fairs in Hong Kong, MAI can be structured so that over a period of three years, the exporters get the support to participate in Hong Kong trade fairs by way of getting, say 75%, 50%, 25% of the cost of participation from the organisation. After the third year, the individual company will be able to participate on its own having realised the potential of the market and the trade volume. Focus can be on the regions in India, which need

A new exhibition will start from September 2003.



additional thrust to promote local products and capabilities through International exhibitions.

Even though the number of Indian companies participating in the exhibition can improve on its own by the potential of the market, if all the Indian pearls, gems and jewellery exporting companies can come under a National Pavilion organised by the pearls, gems and jewellery exporting organisations of India, this will provide a greater business impact. All these stalls would be decorated with an Indian theme and this would project the size of Indian participation in the exhibition and India’s interest in the Hong Kong pearls, gems and jewellery market.

Trade Fairs in India

India organises a number of important international conferences and trade fairs in the pearls, gems and jewellery sector. These exhibitions are drawing substantial number of pearls, gems and jewellery importers from other countries. These can provide a good opening for an Indian exporter. The basic details of some of these fairs are given below.

India International Jewellery Show

Organiser:

The Gem and Jewellery Export Promotion Council Diamond Plaza, 5th Floor, 391-A Dr. Dadasaheb Bhadkamkar Marg, Mumbai - 400 004. Phone: +91.22.2382.1801 / 1806 / 2380.6916 Fax: +91.22.2380.8752 / 2380.4958 Email: [email protected] Exhibition Cell: [email protected] Web: http://www.gjepc.org

India International Jewellery Show (IIJS) is an annual Fair featuring jewellery products of India, organised by the Gem and Jewellery Export Promotion Council (GJEPC). This show is normally held in Mumbai. Started in 1985, this show attracts more than 15,000 visitors (traders, retailers, jewellery manufacturers and equipment manufacturers). International exhibitors from countries like Italy, Australia, Hong Kong, Thailand and others also participate.

Ratnaankita '03

Organiser:

Trans Asian Chamber 13, Amar kunj, Sawarkar Marg, Mumbai, Maharashtra 400 028 Phone: +91.22.2446.7647 / 2447.3829 Fax: +91.22.2447.3829 Email: [email protected], [email protected],



The Trans Asian Chamber of Commerce & Industry (TACCI) is organising an international Gems & Jewellery show, which showcases the industry, not only product wise but also its technical aspects. Starting in October \ Nove,ber 2003 , the event includes exhibition, seminar, beauty pageant and fashion show, to focus on the emergence, growth, future look and changes metamorphosing internationally in the world of gems and jewellery.

Jewels of India

Organiser:

Expoworld No. 2. First Floor, 2nd Main Road, Vasanthnagar, Bangalore, Karnataka Phone: +91.080.2228.4164 Fax: +91.080.2220.2401

Jewels of India, co sponsored by the World Gold Council and endorsed by the India Trade Promotion Organisation, is an annual event that attracts about 100 exhibitors and about 50,000 visitors.

Apart from the above-mentioned trade fairs, many exhibitions and fairs are organised in India, including ‘Jewels of India’, ‘Times Glamour’, ‘Bridal Asia’ etc. For further information, please visit:

http://www.indiatradepromotion.org http://www.trade-india.com/dyn/gdh/fairs/tradefairs/

4.2 Services by the Consulate

Business Delegations

Indian pearls, gems and jewellery export organisations can organise business delegation to Hong Kong. These delegations can be composed of select exporters whose products have more relevance to the Hong Kong market. Complete information about the members of the delegation along with their trade interest may be made available to the Consulate General of India, Hong Kong. The Consulate would arrange business interactions with industry associations, importers, buying offices, etc., in Hong Kong. The Consulate can also arrange general business meetings with pearls, gems and jewellery traders who are members of other chambers of commerce in Hong Kong.

Delegations can interact with government bureaux and agencies to learn about the standards, rules and regulations to be followed when Indian pearls, gems and jewellery products are exported to Hong Kong. Technical details in the two standard regimes between India and Hong Kong can be discussed and options for creating common standards can be explored.

Product Studies

Indian pearls, gems and jewellery exporting organisations and major companies can initiate a deeper study for individual products like branded items, fashion



jewellery, etc. These studies can be made comprehensive by getting detailed information about the pearls, gems and jewellery market for the particular product from various sources in Hong Kong including Government bureaux and agencies, industry associations, importers, buying offices, etc. Indian companies wanting to explore the market can also approach the Consulate for essential information like trade figures, updated information on rules and regulations, etc.

Trade and Investment Queries

Indian organisations and companies interested in entering the Hong Kong pearls, gems and jewellery market can make use of the Consulate’s trade matching services. The Consulate can provide a list of matching business contacts in the Hong Kong pearls, gems and jewellery sector,

including telephone, fax and email details. In case of organisations, this can be circulated among the members of the organisations. Information about Indian business organisations and companies wanting to find partners in Hong Kong are also circulated to important business organisations in Hong Kong.

The Consulate encourages trade queries through email. All queries can be sent to [email protected]

Newsletters

Business Opportunities in Hong Kong

Indian pearls, gems and jewellery export organisations and companies can subscribe to the free e-newsletter published by the Consulate General of India, Hong Kong called “Business Opportunities in Hong Kong”. This newsletter contains business information including economic developments in Hong Kong, trade queries, tender notices, briefs about important commercial associations, forthcoming business conferences and trade fairs, etc. In case of organisations, this valuable business information can be disseminated to the members of the organisations either by emailing the same to their members, or by publishing the details on the organisation’s website. Organisations and companies can subscribe by sending an email to [email protected] or can visit the Consulate’s website to subscribe online (http://www.indianconsulate.org.hk)

Business Opportunities in India

Indian pearls, gems and jewellery organisations and companies can utilise “Business Opportunities in India”, another free e-newsletter published to project the capabilities of the associations in catering to the needs of an importer from Hong Kong pearls, gems and jewellery market. In case of organisations, the role and functions of the organisation with full contact details can be provided. This information would be circulated to important business organisations, apart from individual business people of Hong Kong. This newsletter can also be utilised to advertise various pearls, gems and jewellery fairs and business events organised in India for export of pearls, gems and jewellery. Indian pearls, gems and jewellery export organisations can write to the Consulate General of India, Hong Kong with full details about the event, which can be highlighted in the newsletter. Indian organisations and companies wishing to provide information

The Consulate encourages trade queries through email



about the organisation and company can send an email with the details to [email protected]

Business Centre

The Consulate offers many services through its business centre including meeting venue, conference venue, computer, telephone and fax facilities, identifying and hiring of local assistance, interpreters, translators, etc. The details of the tariff for meeting and conference facilities are given below:

MEETING ROOM (SEATING CAPACITY 5-8 SEATS) Hourly Rate HK$75

CONFERENCE ROOM (SEATING CAPACITY 12-20 SEATS) Half a day: 0900-1300 hrs or 1300 – 1700 hrs HK$500 Hourly Rate HK$150

Website

The Consulate’s website provides relevant and updated business information, including on India-Hong Kong trade and investment, reports on Hong Kong economy, information on doing business in Hong Kong, opening an office in Hong Kong, etc. Contact details of Indian business organisations in Hong Kong are also given. The website features Online Trade Queries, an interactive database providing information on business contacts in Hong Kong and India. Business visitors can search

business contacts based on name of the product, company, SITC code, importing or exporting, etc. Visitors can also register online so that their information is added to the database. Direct access links for membership database of important commercial organisations in Hong Kong are also provided. Online subscription forms, latest issues and archives, of the Consulate’s e-Newsletters are also available. A useful list of important web links to Hong Kong is provided along with links to real time flight information at Hong Kong airport.

For further information, please visit: http://www.indianconsulate.org.hk

Trade Disputes and Miscellaneous Services

Though the role of the Consulate in resolving trade disputes is limited, the Consulate liaises with the disputing parties to seek solution. In case the Indian company wants to pursue arbitration and legal courses, the Consulate can provide contact particulars of relevant organisations in Hong Kong.

The Consulate also provides other services like attestation of trade documents, consular services, etc.

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Online Trade Queries is an interactive database providing information on business contacts in Hong Kong and India


5. Opportunities in China Market and Industry Policies Industrial Bases India’s Exports to China Services offered by the Embassy

5.1 Market and Industry

Market Overview

hina spurred by its growing consumption, tariff cuts and liberalisation of the market is said to become the world’s leading jewellery consumer and processor by year 2010. Spending on jewellery alone in the country is

rising at an average rate of 10% annually. In 2001, Chinese domestic market for jewellery was about US$9.65 billion, while jewellery exports reached US$2.5 billion. In 2002, the total sales of gems and jewellery in China reached US$10 billion, of which diamond sales reached US$1.1 billion. It is estimated that in 2003, diamond sales in China will reach US$1.3 billion. Gold consumption reached 207.5 tons, making China the fourth largest country in gold jewellery consumption. Annual sales of pearl and precious stones amount to US$24 billion. With an average growth of over 6%, China’s jewellery market is predicted reach US$22 billion by 2010, accounting for 10% of the world market. In platinum consumption, China has overtaken Japan as the market leader. 52% of platinum jewellery in the world is made in China. In the first ten months of 2002, China imported Platinum worth US$68 million. Shanghai has more than 100 exclusive platinum retail stores selling platinum pieces and platinum jewellery.

In diamonds, China occupies 1.8% of the world’s diamond market share. Shanghai accounts for one-fifth of China's total diamond consumption. In the first 11 months of 2002 China imported diamonds and related products worth US$38.3 million through the Shanghai Diamond Exchange Centre (SDEC), the only legal trading channel in China.

The SDEC imported US$37.4 million in diamonds for ornament making, including finished diamonds making up 97.7% of the company’s total diamond imports. The other US$900,000 worth of diamond imports were for industrial use. The figure highlights the rapid growth in legal diamond imports since the central government exempted the centre from tariffs on diamond products last July. However, the import volume lags far behind consumer demand for

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Chinese domestic market for jewellery was about US$10 billion in 2002.



diamond products in China. Diamond smuggling is still a widespread problem. The large percentage of imported diamonds used for ornament making indicates China’s demand for diamonds remains brisk. SDEC also exported USD 1.05 million worth of diamonds, accounting for 31% of China’s total diamond exports. Currently, the Shanghai Diamond Exchange Centre has 94 members, 63 of which are foreign/overseas funded by foreigners or from overseas. Shanghai's is moving towards becoming one of the world's top diamond jewellery markets, registering a 40% annual growth in the last four years.

Policies

The Chinese government tightly controls imports of gems and jewellery. The tariff rate of over 8% is one of the highest in the world. 17% VAT is also added. It is to be noted that there is 0% tariff for uncut diamonds. Further, China's General Administration of Customs (GAC) recently promulgated two policy documents concerning the diamond trade. These two documents are Provisions of the GAC on the Supervision of Diamond Entry and Exit at the Shanghai Diamond Exchange and Notice of the GAC on the Implementation of Policies Concerning Diamond and Diamond Jewellery Imports. The two new documents make it clear that the Shanghai Diamond Exchange (SDE) is a special zone established with the approval of the State Council for the handling of diamond import and export formalities and for customs control in the diamond trade. GAC maintains an office within SDE to carry out closed management.

The Provisions cover measures for the management of SDE and its members, the supervision of the movement of diamonds between SDE and offshore enterprises and between SDE and domestic enterprises, as well as the management of diamond processing. The Notice stipulates that with effect from 1 June 2002, diamond imports and exports under China's general trade and the domestic sales of diamond under the processing trade are required to complete import and export customs declaration formalities at the SDE customs; other customs offices may not handle these two categories of diamond imports and exports. The SDE customs will levy import-related VAT on the domestic sale of diamonds mentioned above (including diamonds in finished products). Diamonds imported into China (except Hong Kong, Macau and Taiwan) through SDE will be exempt from import tariffs. Currently, the Shanghai Diamond Exchange Centre has 94 members, 63 of which are funded by foreigners or from overseas.

Tariff on Diamonds

In addition to the 17% value-added tax and the 10% consumption tax, the current tariffs for rough diamonds and polished diamonds are 3% and 9% respectively. The high taxation has not only affected the development of the country's diamond processing industry but also has resulted in rampant trafficking.

The new rules stipulate the following:

• The consumption tax formerly collected at the import and processing stage will be postponed until the retail stage.



• The consumption tax for unset polished diamonds and diamond jewellery will be collected at a reduced rate of 5%.

• Rough diamonds and unset polished diamonds directly entering the SDEC from overseas will be exempted from value-added taxes and consumption taxes.

• Diamonds traded in the SDE will be exempt from value-added taxes. Full tax refunds will be given based on the difference between the former refund rate of 13% and the tax collected at the processing stage, when the diamonds are exported.

• Diamond flowing from the SDE to overseas will not enjoy tax refunds. • On diamonds imported from the SDE for use in domestic markets,

value-added tax shall be duly paid. • For customs supervision, if diamonds imported in the name of

processing trade are to be sold domestically, the diamonds must be sent to the SDE for transactions or filing.

Industrial Bases

While Shanghai one of the world's fastest-growing diamond markets, Shenzhen in South China is the base for jewellery processing. Shenzhen is a big market in its own right, but more importantly, it has now become a gold jewellery-processing base. According to a representative of the Shatoujiao Bonded Area, Shenzhen's gold processing volume makes up 70% of the national total and accounts for 10% of the city's industrial output value. The Shatoujiao Bonded Area alone contributes to half of Shenzhen's gold jewellery output. In fact, gold and jewellery processing has become one of the three pillar industries in the bonded area. The other two industries are computers and electronic toys. Shenzhen and its surrounding area has 800 jewellery manufacturers and supplies between 70% and 80% of jewellery offered for sale in the domestic market in China. The Shenzhen Special Economic Zone is now the largest jewellery manufacturing and wholesale centre supplying the domestic market in China, the gem-set gold jewellery manufacturing centre for the domestic market, the centre for platinum jewellery production and the gemstone-polishing centre.

The following table provides information regarding China’s imports of gems and jewellery in 2001 and 2002:

CHINA’S IMPORT OF PRECIOUS STONES AND PRECIOUS METAL (US$ million)

JANUARY - OCTOBER US$ MILLION % SHARE % CHANGE

HS DESCRIPTION 2001 2002 2001 2002 2002/2001 WORLD 200332.2 237835.7 100 100 18.72 71 Precious stones,

metals 773.8862 1103.656 0.39 0.46 42.61

7102 Diamonds 527.3085 823.7755 68.14 74.64 56.22 7110 Platinum 48.87124 67.80669 6.32 6.14 38.75 7106 Silver 41.44617 51.90252 5.36 4.7 25.23 7103 Other stones, Not strung 31.32184 40.68963 4.05 3.69 29.91

7113 Jewellery with precious metals 41.2281 38.3602 5.33 3.48 -6.96

7104 Synthetic, not strung 25.46861 28.36442 3.29 2.57 11.37 7117 Imitation jewellery 20.3395 21.15445 2.63 1.92 4.01



7115 Other articles with precious metals 23.14424 16.35662 2.99 1.48 -29.33

7101 Pearls 8.393001 7.75629 1.08 0.7 -7.59 7116 Articles with pearl, stone 1.802039 2.581762 0.23 0.23 43.27 7107 Base metals with silver 1.914249 1.853526 0.25 0.17 -3.17 7105 Dust and powder 1.422215 1.408871 0.18 0.13 -0.94 7118 Coin 0.379336 0.772084 0.05 0.07 103.54 7111 Base metals with Plat 0.149113 0.590392 0.02 0.05 295.94 7114 Gold, silversmith articles 0.664722 0.263359 0.09 0.02 -60.38

7112 Waste + scrap, precious metals 0.033415 0.019317 0 0 -42.19

China and the WTO

The cut in import tariffs for gold jewellery and diamonds upon China's entry into the World Trade Organisation (WTO) is good news to the foreign players. According to China's WTO deal, the jewellery industry is among the first batch of industries opening up to foreigners, said Kang Xingzhou, vice-president of China National Arts & Crafts Corporation.

IMPORT DUTY RATE DESCRIPTION OF GOODS MFN BA*

VAT (%) CT (%) UNIT

Natural or cultured pearls 21 21 17 10 Grams Un-worked Diamonds 3 3 17 10 Carat Worked but un-mounted diamonds 8 7 17 10 Grams Un-worked precious stones (other than diamonds) and semi-precious stones

3 2.8 17 10 Grams

Un-mounted natural or synthetic or reconstructed precious stones (other than diamonds) and semi-precious stones

8 7 17 10 Carat

Un-mounted precious or semi-precious stones

8 7 17 10 Carat

Silver jewellery and silver articles of jewellery inlayed with stones or pearls

26.7 22 17 0 Grams

Gold jewellery and gold articles of jewellery inlayed with stones or pearls

26.7 22 17 0 Grams

Other precious metal jewellery and its articles of jewellery inlayed with stones or pearls

35 30 17 0 Grams

Imitation jewellery 26.5 - 35 26.5-35 17 0 Grams

* BA: Bangkok Agreement: According to the “Bangkok Agreement”, India, Korea, Sri Lanka, Bangladesh and Laos enjoy the BA Import Duty Rate. Other countries that have diplomatic relationship with China enjoy the MFN Import Duty Rate.

Important Exhibitions

The Embassy of India, Beijing prepares a product-specific exhibition list based on India's top exports of the previous year at the beginning of every year for circulation among various ministries, departments, export and import councils, chambers of commerce and business enterprises. Interested parties could contact the Mission for assistance in getting further information, booking of stalls and other logistics, etc.

A list of important exhibitions in China in the area of pearls, gems and jewellery are given below. For many events, the venue of these exhibitions are changed annually. The Embassy publishes a fresh list at the beginning of the new year for the convenience of the Indian participants. It should also be noted that most of the exhibitions and fairs in China are organised or co-ordinated by the China



Council for Promotion of International Trade (CCPIT). Interested parties could contact them directly for further information:

China Council for Promotion of International Trade No.1 Fuxingmenwai Street Beijing-100860, P.R. China Phone: +86.10.6801.3344 (Operator), +86.10.6803.4830 Fax: +86.10.6803.0747, 6801.1370

Exhibitions

China International Gold, Jewellery and Gem Fair, Shenzhen

Organiser:

CMP Asia Ltd 17/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong Phone: +852.2827.6211 Fax: +852.2827.7831 Email: [email protected] Web: http://www.cmpasia.com

Luxury China, Shanghai

Organiser:

Munich Trade Fairs Consultancy (Shanghai) Co., Ltd. Phone: +86.21.6886.3366 ext. 804 Fax: +86.21.6886.2267 Email: [email protected]

China International Jewellery Fair, Beijing

Organiser:

Gemmological Association of China Room No: 602, A5 West Yuetan Street, Xicheng dist., Beijing: 100045 Phone: +86.10.6804.0679 Fax: +86.10.6804.5040 Email [email protected]

Shanghai Gem, Jade & Jewellery Exhibition

Organiser:

Shanghai International Exhibition Co., Ltd. Phone: +86.21.6378.2828 Fax:: +86.21.6545.5124 Email:[email protected]



5.2 India’s Exports to China

Given the increasing purchasing power of China’s consumers, precious and semi-precious stones including jewellery, is an area that has recently seen large growth. China also has a large requirement of industrial diamonds. Some Indian companies have already set up joint ventures in this field. With increased prosperity, a new consumer class is arising in China with a demand for products like diamonds, semi-precious stones, gems and jewellery. Chinese women form the largest consumer in China, however being westernised in their tastes, the Indian exports should cater to their needs. It is reported that consumers in Chinese are increasingly purchasing diamonds and other precious stones more as an effective hedge against inflation. The following table provides information regarding India’s exports to China in 2002

INDIA’S EXPORTS TO CHINA – 2002

HS DESCRIPTION US$ MILLION % SHARE % CHANGE 2001 2002 2001 2002 2002/2001

India 1700 2274 0.70 0.77 33.79 71 Precious stones & metals 83.442 101.297 4.91 4.45 21.40 7102 Diamonds 82.405 99.887 98.76 98.61 21.21 710239 Non-industrial, worked 81.503 97.267 98.90 97.38 19.34 710210 Unsorted 0.707 2.620 0.86 2.62 270.69 7103 Other stones, not strung 1.032 1.053 1.24 1.04 2.05 710391 Ruby, sapphire, emerald 0.992 0.775 96.14 73.59 -21.88 710399 Semi-precious/worked 0.038 0.228 3.69 21.68 500.31 710310 Un-worked 0.002 0.050 0.17 4.72 2673.84

5.3 Services Offered by the Embassy

Embassy of India, Beijing can provide valuable services to the Indian gems and jewellery organisations and companies pursuing economic links with Mainland China, including business match-making for trade and investment queries, providing information about relevant exhibitions, arranging meetings for the visiting business delegations, providing resources and inputs for product studies, etc. The Embassy operates a business centre and provides important information through its website http://www.indianembassy.org.cn. For further information, please contact:

EMBASSY OF INDIA Commercial Wing 1, Ritan Dong Lu, Beijing – 100 600 Phone: +86.10.6532.3291 Fax: +86.10.6532.4684 Email: [email protected] Web: http://www.indianembassy.org.cn

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6. India’s Potential Industry Overview Major Products Policy Measures Organisations and Institutions

6.1 Industry Overview

ince time immemorial, India has been synonymous with gems and jewellery. Today, India is the largest manufacturer and exporter of polished diamonds, is the fastest growing jewellery exporter and aspires to become a major

trading centre.

At the base of this growth is the massive diamond-manufacturing sector, which contributes about 80% to the total gems and jewellery export basket. The industry has grown from its small origins in the 1950s and has established itself as the world's largest manufacturing centre of cut and polished diamonds for the last many years, contributing 55% of the world supply in terms of value and 80% in terms of caratage. Nine out of ten stones set in jewellery worldwide come from India.

India is the largest consumer of gold in the world. It is estimated that the current annual demand for gold in the country is well over 800 tonnes. Naturally, India is also the largest fabricator of gold. Perhaps India’s penchant for gold and gold jewellery has prevented her from becoming one of the leading jewellery exporters. However, due to positive policy measures and the effective cross-learning between diamond and jewellery making industries, coupled with synergy generated by the existence of worldwide

network of Indian diamond channels, India is emerging as a fastest-growing jewellery exporters in the world, averaging a growth of 44% each year over the last decade.

India’s strength lies in the more than two million highly skilled workforce in the country in the gem & jewellery sector, out of which one million are exclusively engaged in export production. The workforce is economic and therefore most competitive when compared with any other cutting centres in the world. No other country in the world can claim of such a huge highly skilled competitive labour force, which now works on the latest state-of-the-art technology.

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India is the largest manufacturer of polished diamonds, largest consumer of gold and fastest growing jewellery exporter.



Extensive network of Indian offices all over the world, established by Indian diamantaries, have allowed Indian gems and jewellery to reach out to consuming markets more effectively. Indian diamond communities settled in diamond centres outside India and their various representative associations and bodies have played a noteworthy role in the development of this trade.

Indian gems and jewellery industry is a brilliant example of India’s export-led growth. In 2001-02, gems and jewellery exports from India amounted to US$7.53 billion, or nearly one-fifth of the country’s total exports. The industry has registered a dramatic growth within a decade, with exports having shot up from US$2.93 billion in 1991-92 to its present level.

India offers a wide variety of gems and jewellery suited for every need of every market in the world. Innovative technology is merged with highly developed design skills that have won for Indian designers a number of awards in prestigious international jewellery design competition is like those organised by de Beers and the World Gold Council. The largest skilled and trained workforce and vast resources of polished diamonds and coloured gemstones available at extremely competitive rates, make India to offer quality jewellery available in attractive price ranges. The following table provides information regarding India’s gems and jewellery export destinations:


DESTINATION DIAMONDS TOTAL GEMS & JEWELLERY

USA 1972.71 2750.87 Hong Kong 1600.11 1638.36 Belgium 842.35 845.01 Japan 329.22 362.31 Israel 263.85 265.46


EXPORTS OF GOLD JEWELLERY FROM INDIA TO MAJOR MARKETS (1997-2002) (US$ million)

DESTINATION 01-02 USA 647.02 UAE 234.04 UK 85.96 Singapore 44.99 Hong Kong 12.99 Kuwait 12.77


6.2 Major Products

Diamonds and Coloured Stones

Diamonds

India has given the world some of the most rarest and mystic diamonds. India was, at one time, the undisputed leader in this field. Diamond production in India can be, traced back to almost the 8th century BC, when the first ever diamond in the world was mined in India. Some of the superlative, most famous diamonds of the world like the Great Moghul, Kohinoor, Hope, Pitt, Nizam, Idol’s Eye, Orloff, etc. were born in India. In fact, India was the sole producer and supplier



of diamonds to the world before the discovery of Brazilian fields in the 17th century and the later emergence of South Africa, Russia and Australia, as major producers.

India has been well known over the centuries as a producer of fine ornaments of many styles, shapes and in different materials to suit all tastes and pockets. Savings, particularly in the countryside, are usually stored away in the form of gold and silver jewellery to serve the dual purpose of adornment as well as investment. No wonder, it is the largest consumer of gold in the world.

The tiny cottage activity of yester years has blossomed into a mammoth and gigantic industry today. The gem & jewellery sector is not thriving just in the domestic arena. The importance of this industry can be gauged from its contribution to the national exchequer. This segment remains the top export revenue earner for the country. In fact, 1/5 of the foreign exchange earnings come from the exports of gems and jewellery.

INDIA’S EXPORT OF GEMS AND JEWELLERY (US$ million)

DIAMONDS TOTAL GEMS & JEWELLERY 1968-1969 40 62 1978-1979 846 887 1988-1989 2910 3145 1998-1999 5026 6212 1999-2000 6648 8145 2000-2001 6187 7779 2001-2002 5972 7556


Diamonds is the single largest commodity exported from India. The success story of the Indian diamond industry is unique. From humble beginnings, India rose to become the world leader in a span of just two decades. India now accounts for nearly 55% of world net exports of cut & polished diamonds in value terms, 90% in terms of pieces and 80% by caratage. No other export segment of the country has such a significant share in the world market.

1999-2000 was a record-breaking year for the Indian gem and jewellery sector. Crossing the US$8 billion mark, the exports registered a performance of US$8145.02 million (Rs.35169.80 crore) compared with US$6211.66 million (Rs.26038.32 crore) in 1998-99, an overall increase of 31.12%.

Various factors have contributed to this feat. At the forefront is the skill of the Indian artists and. The entrepreneurship of the Indian businessmen, coupled with establishment of a marketing network worldwide, supported by strong financial base of the industry and the financial institutions of the country.

Today, after creating a niche for itself in the diamond world with small diamonds, India has gone on to develop the skills for cutting and polishing largest stones and fancy cuts. Its large modern factories incorporate the state of the art technology, including a large number of laser missions.

INDIA’S EXPORT OF CUT & POLISHED DIAMONDS TO MAJOR MARKETS (US$ Million)



2001-2002 SHARE % 2000-2001 SHARE % USA 1972.71 33.03 2144.33 34.66 Hong Kong 1600.11 26.79 1669.97 26.99 Belgium 842.35 14.11 908.22 14.68 Japan 329.22 5.51 375.05 6.06 Israel 263.85 4.42 268.32 4.34


INDIA’S IMPORT OF ROUGH DIAMONDS FROM MAJOR SUPPLIERS (US$ million)

2001-2002 SHARE % 2000-2001 SHARE % Belgium 2438.86 57.99 2535.68 58.29UK 1042.92 24.8 1130.27 25.98Israel 240.90 5.73 310.37 7.14Hong Kong 388.96 9.25 323.17 7.43UAE 171.69 4.08 167.81 3.86


Coloured Gemstones

India has always been a major centre of the coloured gemstone trade. Nine out of ten emeralds in the world are polished in India. Recently Tanzanite has swept the jewellery fashion world and seven out of ten tanzanite by pieces and 80% by value are polished in and exported from India.

The coloured gemstones industry, which is centred in and around Jaipur, is also diversifying into gemstone-studded jewellery manufacturing and exporting on a large scale.

INDIA'S EXPORT OF COLOURED GEMSTONES TO MAJOR MARKETS (US$ million)

2001-2002 SHARE % 2000-2001 SHARE % U.S.A. 88.91 48.67 103.72 51.00Hong Kong 24.28 13.29 30.33 14.91Thailand 21.57 11.81 19.02 9.35Japan 28.00 15.33 16.56 8.14Germany 5.48 3.00 11.28 5.55Switzerland 4.28 2.34 7.07 3.48France 2.56 1.40 2.70 1.33Italy 6.34 3.47 8.19 4.03Others 1.27 0.70 4.49 2.21Total 182.69 100 203.36 100


Jewellery

Recently, India is emerging as a fastest-growing jewellery exporter in the world, averaging a growth of 44% each year over the last decade. Exports of gold jewellery in 2001-02 have touched US$1,166 million from just US$304 million in 1991-92. India's export jewellery industry is making rapid strides in terms of missionary and design development. It also offers quality, designed and management, which are on par with world standards.

India is known to be the largest consumer of gold in the world. It is estimated that the current annual demand for gold in the country is well over 800 tonnes. Naturally, India is also the largest fabricator of gold. Perhaps India’s penchant for gold and gold jewellery has prevented her from becoming the world's leading jewellery exporter; as a result, we have not been able to replicate our success story of diamond exports in the field of jewellery exports.



Although diamond exports started picking up in the seventies/eighties, our jewellery exports could not take off due to the controls that existed at the time. After the repeal of the Gold Control Act of 1961 during the initial stages of Indian economic liberalisation, jewellery exports started picking up. The diamond community ventured in to the jewellery manufacturing. The Export Processing Zones

set-up across the country started attracting jewellery manufacturers who quickly set-up their base in these complexes and started exporting jewellery which was in demand in the western markets. And within a short span of eight years India’s jewellery exports jumped from US$203 million in 1990-91 to US$1.16 billion in 2001-02.

Indian designers have made a mark on the world jewellery scene and won recognition for design development as well. Our designers have learned quickly and are winning awards at international competitions underscoring the ability of the Indian industry to cater to varied tastes in varied markets. This ability to adapt and innovate demonstrates the strength of the Indian jewellery industry, which is a thousand year old industry. All aspects of jewellery making are advancing towards international standards with relative ease. It is only a matter of time before India becomes the most sought after jewellery centre and has the same position in the international jewellery market that it enjoys in the diamond and coloured gemstone market, globally.

The Government too has played a progressive role and its pragmatic policies have boosted the industry’s own efforts. In recent years, the jewellery industry has been earmarked as one of the thrust areas for exports and appears to have a sparkling future ahead of it.

INDIA’S EXPORT OF GOLD JEWELLERY TO MAJOR MARKETS (US$ million)

DESTINATIONS 2001-2002 SHARE % U.S.A. 647.03 55.45U.A.E. 234.04 20.06U.K 111.24 9.53Singapore 44.99 3.86Hong Kong 12.99 1.11Switzerland 9.13 0.78Kuwait 12.77 1.09Germany 11.95 1.02Others 82.69 7.09Total 1166.83 100


6.3 Policy Measures

Exim Policy 2002-07

Following were the major highlights of the Exim Policy announcements for the year 2002-2003 (April 2002 / March 2007 Policy, amended as on March 2003 ):

• Import of Rough Diamonds allowed without licences at zero percent duty. Licensing regime for rough diamond abolished.

India’s jewellery exports jumped from US$203 million in 1990-91 to US$1,160 million in 2001-02



• Value addition Norm for Plain Gold/Platinum/Silver jewellery articles reduced from 10% to 7%.

• Import of Gold Jewellery and Silver Jewellery allowed at applicable rate of duty.

• No Seizure of stock will be made by any agency affecting manufacturing activity (subject to certain conditions).

• Authorised offices/agencies in India of GIA, IGI, EGL, HRD, WDC allowed for exporting cut & polished diamonds of 0.50 of a carat and above to the said laboratories/agencies for Certification/Grading and re-import with a view to encourage and promote exports of such diamonds.

• Jaipur and Hyderabad Ports included for Personal Carriage of Gems and Jewellery Export/Import Parcels

• Diamond Imprest Licence for import of cut and polished diamonds includes semi-processed diamonds, half cut diamonds, broken in any form for mixing.

• Cut and Polished diamonds also included under Personal Carriage for Export Promotion Tours/temporary displays.

• 100% retention of foreign exchange in EEFC account as special strategic package for status holders, Normal repatriation period extended from 180 days to 360 days.

• Supply from DTA to SEZs termed as physical exports • Offshore Banking Units to be permitted in SEZs.

Budget 2003-04

The Ministry of Commerce provides support to the gem & jewellery export sector through its policy measures continuously. Following are the elements in the Union Budget 2003-04 concerning the gems and jewellery industry:

1. Rough Coloured Gemstones import allowed without licence at 0% duty

2. Cut and Polished Diamonds and Cut and Polished Coloured Gemstones import allowed at reduced duty, which is 5%. (Earlier it was basic duty 15%)

3. Import of findings and mountings allowed. (Earlier it was under OGL with applicable rate of duty, now allowed at concessional rate of duty)

4. Import of gold bar (TT) other than bars, bearing manufacturers' or refiner's engraved serial number and weight expressed in metric units and gold coins at Rs.100 per 10 gms.

5. Import of (plain gold jewellery and mountings and findings) gold in any form including tola bars and ornaments, but excluding ornaments studded with stones or pearls at concessional rate of duty Rs.250/- per 10 gms.

6. Silver in any form at Rs.500 per kg (No change)



6.4 Organisations and Institutions

The Gems & Jewellery Export Promotion Council

the gems and jewellery export promotion Council is the apex body of a dynamic industry and was set up by the Ministry of Commerce, Government of India in 1966. It has played a significant role in revolution of the industry to its present stature and moulded the scattered efforts of individual exporters into a powerful engine driving the country's export-led growth.

The council presently has over 7000 members spread all over the country. With its headquarters in Mumbai, it has regional offices in Delhi, Kolkata, Chennai, Jaipur and Surat. The council's primary objective is to promote and thereby enhance exports of gems and jewellery from India. The other functions of the council are:

• to provide guidance and information to members • to liaise between the trade and the government on issues pertaining to

the industry • to facilitate foreign buyers • to provide training and R&D support for the development of the

trade

the council organises delegations, participates in played tennis around the world, including the USA, Europe, Hong Kong and the Middle East, organises India international jewellery show, conducts seminars, workshops and conferences and ranks institutions for technology improvement and training.

Contact: THE GEMS & JEWELLERY EXPORT PROMOTION COUNCIL Diamond Plaza, 5th Floor, 391-A, Dr. Dadasahed Bhadkamkar Marg, Mumbai 400004 Phone: +91.22.2382.1801 to 06 Fax: +91.22.2308.8752 Email: [email protected]

(For addresses of the regional offices, please see Part 8: Resources)

Institutions

Jewellery Product Development Centres

The Jewellery Product Development Centre (JPDC) was first set up in Mumbai in 1985 and subsequently in New Delhi and Jaipur as well. These Centres impart training in the latest techniques of jewellery design and the manufacturer through regular courses and conduct workshops for advanced to training in different fields.

Contact: JEWELLERY PRODUCT DEVELOPMENT CENTRE, MUMBAI D. -- 15, Commerce Centre, 4th Floor, Tardeo Road, Mumbai 400034 Phone: +91.22.2492.1527 Fax: +91.22.2496.6498



Email:[email protected]

JEWELLERY PRODUCT DEVELOPMENT CENTRE, DELHI F Block, Jhandewalan Flatted Factories Complex, Rani Jhansi Road, New Delhi 110055 Phone: +91.11.2353.9063 Fax: +91.11.2355.1186 Email: [email protected]

JEWELLERY PRODUCT DEVELOPMENT CENTRE, JAIPUR Rajasthan Chambers Bhawan, M.I. Road Jaipur 302001 Phone: +91.141.570439 Email: [email protected]

Indian Diamond Institute

Based in India's Diamond City, Surat, Indian Diamond Institute (IDI) offers full-time, part-time and the correspondence courses in three languages, with hostel facilities and the special packages for overseas students. It is an accredited training centre for a number of international institutions. The GJEPC has recently launched the Sardar Patel Centre of Jewellery Design and Manufacture on the IDI campus in association with the Ministry of Commerce and the Government of Gujarat.

Contact: INDIAN DIAMOND INSTITUTE Katargam, GIDC, Sumul Dairy Road, Surat 395008 Phone: +91.261.7480.809 / 7481.110 Email: [email protected] Web: http://www.diamondinstitute.ac.in

Indian Gemmological Institute

The New Delhi based Indian Gemmological Institute (IGI) provides training in identification and grading of diamonds and coloured gemstones

Contact: INDIAN GEMMOLOGICAL INSTITUTE F Block, Jhandewalan Flatted Factories Complex, Rani Jhansi Road, New Delhi 110055 Phone: +91.11.2367.9732

Gem Testing Laboratory

The Gem Testing Laboratory at Jaipur, which celebrated its Silver Jubilee in 1997, offers comprehensive training and a wide variety of gemstones related courses. Recently, it has launched a full-fledged gemstone testing diploma course.

Contact: GEM TESTING LABORATORY Rajasthan Chambers Bhawan, M.I. Road Jaipur 302001 Phone: +91.141.570439 Email: [email protected]

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7. Background Information India – Hong Kong Relations India – China Economic Links Practical Business Tips

7.1 India-Hong Kong Relations

Overview

inks between India and Hong Kong date back to the 1840s, when the British came to the territory and have since flourished to encompass many fields of activity, including trade, culture, tourism and academics.

Over the past more than 160 years, the Indian community has become increasingly integrated into Hong Kong and has contributed not only to the local community, but also to bilateral relations. Trade has traditionally been the main link, with sourcing from and supplying to India being a long-standing feature. Hong Kong has also been an active partner for India, with bilateral trade reaching US$4 billion in 2002, increasing Foreign Direct Investment coming from Hong Kong to India and almost 30% of Foreign Institutional Investment into India originating from Hong Kong.

Relations between Hong Kong and India, besides the prominence of trade, have also expanded to many other areas. Members of the Indian community have participated actively in creating some of Hong Kong’s most well known institutions, including the Hong Kong University, the Hong Kong and Shanghai Banking Corporation, the Ruttonjee Hospital and Star Ferry. A number of cultural activities are organised by Indians in

Hong Kong, keeping them in touch with India. In addition, increasing academic exchanges, at both formal and informal levels, have been taking place, contributing to the strengthening of these links. The Consulate General of India promotes academic, cultural and commercial exchanges between Hong Kong and India and the success of these efforts can be seen by way of increasing interaction. The Consulate also actively promotes tourism to India and the number of visas issued has been going up, crossing 12,000 in 2002. The total number of tourist arrivals from India, too, is on the increase, the figure for 2002 being more than 215,000.

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Members of the Indian community have participated actively in creating some of Hong Kong’s most well-known institutions.



The Commission for India was set up in 1951 and was re-designated as the Consulate General of India on 15 October 1996.

Trade Links

The following table shows the trend in India -Hong Kong trade over the past few years:

INDIA – HONG KONG TRADE OVERVIEW (US$ million)

YEAR INDIAN IMPORTS INDIAN EXPORTS TOTAL TRADE BALANCE FOR INDIA %

1997 685 2110 2795 +1425

1998 679 1876 2555 +1197 - 8.6%

1999 1099 2216 3315 +1117 +29.8%

2000 1294 2624 3918 +1330 +18.2%

2001 1202 2290 3491 +1088 -10.9%

2002 1441 2494 3935 +1053 +12.7% (Source: Census & Statistics Department, HKSAR)

According to DGCI&S statistics, with Rs.112 billion (US$2.3 billion approx) worth of imports from India during 2001-02, Hong Kong was the third largest destination for Indian products after the USA (Rs.405 billion) and UAE (Rs.118 billion). However, the share of India’s trade with Hong Kong is less than 1%, which provides vast scope for further growth in bilateral trade between India and Hong Kong.

India’s trade with Hong Kong is characterised by dominance of a few products that form the bulk of the bilateral trade. Pearls, precious and semi-precious stones, textile yarns and leather are important Indian export items and pearls, precious stones, silver & platinum, semi-conductors, telecom equipment, office equipments, etc are important Indian import items.

In 2002, India was the 17th major trading partner of Hong Kong. India-Hong Kong trade reached US$3,935 million (+12.7%). Bilateral trade has not only recovered from the slump in 2001 (US$3,491 million), but also marginally crossed 2000 levels (US$3,918 million). Indian exports reached US$2,494 million (+8.9%). Of this, US$1,404 million (+12.9%) worth of goods were re-exported to other countries via Hong Kong. Hong Kong exported US$1,441 million (+19.9%) worth of goods to India. Hence, India had a positive trade balance of US$1,053 million in 2002.

INDIA – HONG KONG TRADE: AN OVERVIEW (US$ billion)

2000 2001 2002 US$ % US$ % US$ %

India to Hong Kong Exports to Hong Kong 2.6 +18.4 2.3 -12.7 2.5 +8.9 Hong Kong to India Domestic Exports 0.2 +9.9 0.06 -65.5 0.05 -11.5 Re-exports 1.1 +19 1.1 +1.8 1.4 +21.6 Total exports 1.3 +17.7 1.2 -7.1 1.4 +19.9 Total bilateral trade 3.9 +18.2 3.5 -10.9 3.9 +12.7 Trade balance for India +1.3 +1.1 +1 (Source: Census & Statistics Department, HKSAR)



Indian Exports to Hong Kong

In 2002, India exported a total of US$2,494 million worth of products to Hong Kong, marking a growth of +8.9%. Some of the major export items from India to Hong Kong include Pearls, precious & Semi-precious stones, Leather, Textile yarn, Flat-rolled products of Alloy Steel, Jewellery, etc. The following table provides details of the top ten export items from India to Hong Kong in 2002.

INDIAN EXPORTS TO HONG KONG - TOP TEN PRODUCTS (2002) (US$ million)

COMMODITY VALUE SHARE GROWTH Pearls, precious & Semi-precious stones 1825 73.2 +11.7 Leather 159 6.4 +48.0 Textile yarn 102 4.1 -37.8 Flat-rolled products of Alloy Steel 50 1.9 +236.7 Jewellery 29 1.2 +14.3 Polymers of Styrene, in primary forms 20 0.8 +226.8 Other Plastics in Primary form 18 0.7 +26.7 Synthetic organic colour lakes/colouring matter/preparations 18 0.7 +4.8 Textile fabrics, woven, other than cotton/man-made fibres 16 0.6 +5.5 Medicinal & pharmaceutical products, other than medicaments 15 0.6 -11.1 (Source: Census & Statistics Department, HKSAR)

India is the single largest exporter of pearls, precious and semi-precious stones to Hong Kong and holds more than 40% share in Hong Kong’s total imports from the world. This is also the single most important item of Indian exports to Hong Kong. It accounted for 73.2% of the total exports from India to Hong Kong in 2002 and marked a positive growth of 11.7%. Most of these imports are re-exported from Hong Kong to other markets, including North America, Europe, etc. Hong Kong is the second largest importer of leather and leather products in the world, next to the USA, holding a 12% share in the global leather imports. Leather is one of the fastest growing items of exports from India to Hong Kong and is the second most important item of Indian exports to Hong Kong. Indian export of leather reached the value of US$159 million (6.4% of total Indian exports to Hong Kong) in 2002 marking a +48% growth from its 2001 level during which it grew again by +46.5%.

India exported US$102 million worth of textile yarn in 2002. Textile yarn forms 4.1% of the total Indian exports to Hong Kong. However, India’s export of textile yarn to Hong Kong has declined by –37.8% in 2002 from US$164 million in 2001. Starting from a low base, flat-rolled products of alloy steel has marked +236.7% growth in 2002 and reached the value of US$50 million from US$14 million in 2001. With the need for quality steel products increasing and India’s focus on exporting manufactured items, export of flat-rolled products of alloy steel from India to Hong Kong is expected to grow further.

Jewellery: Export of jewellery from India to Hong Kong is also on the rise. It has reached US$29 million marking a growth of 14.3%. This is followed by polymers of styrene in primary forms (US$20 million, +226.8%), other plastics in primary form (US$18 million, +26.7%), synthetic organic colour lakes/colouring matter/preparations (US$18 million, +4.8%), synthetic textile



fabrics (US$16million, +5.5%) and medicinal and pharmaceutical products (US$15 million, -11.1%) form major export items of India.

Focus Products for Exports to Hong Kong

The above-mentioned products are important export items from India to Hong Kong. There are many more products offering promising export opportunities from India to Hong Kong. Upon analysing Hong Kong’s top imports and India’s top exports, feedback from trading community, trends in Indian exhibitor participation in Hong Kong trade fairs and other relevant factors, the following products have been identified as focus products for export from India to Hong Kong:

• Gems and Jewellery • Cotton Yarn, Fabrics • Dyes/Intermediaries • Finished Leather • Drugs, Pharmaceuticals & Chemicals • Electronic Goods • Plastics • Primary and Semi Finished Iron & Steel • Manufactures of Metals • IT services • Apparels • Travel bags and footwear • Handicrafts • Agricultural and food products • Telecommunication equipment

Indian Imports from Hong Kong

In 2002, Hong Kong exported US$1,441 million (+19.9%) worth of goods to India. The important items of exports are pearls, precious and semi-precious stones (US$652 million, +18.5%), telecommunication equipment & parts (US$189 million, +207.8%), semi-conductor, electronic valves & tubes, etc. (US$76 million, +69.4%), Parts & accessories of office machines/computers, (US$46 million, -21.1%) and silver and platinum (US$40 million, -52.9%).

INDIAN IMPORTS FROM HONG KONG - TOP TEN PRODUCTS (2002) (US$ million)

COMMODITY VALUE SHARE GROWTH Pearls, precious & semi-precious stones 652 45.3 +18.5 Telecommunications equipment & parts 189 13.1 +207.8 Semi-conductors, electronic valves & tubes, etc. 76 5.2 +69.4 Parts & accessories of office machines/computers 46 3.2 -21.1 Silver & Platinum 40 2.8 -52.9 Watches and clocks 37 2.6 -6.9 Computers 34 2.4 +72.0 Miscellaneous manufactured articles 27 1.9 +16,2 Cotton fabrics, woven 20 1.4 +30.0 Instruments & appliances, for medical, surgical, dental or veterinary purposes

19 1.3 +33.2

(Source: Census & Statistics Department, HKSAR)

Investment Links

Hong Kong is the leading financial centre of Asia and is one of the top sources of outward direct foreign investment in Asia. In 2001, Hong Kong invested



about US$11 billion. Hong Kong’s investment in the Chinese Mainland is about US$187 billion in cumulative direct investment.

India has approved about 300 foreign collaboration proposals from Hong Kong with a corresponding FDI of about US$500 million. Hong Kong companies ranked 19th in the list of countries in terms of cumulative FDI. The official figures about Hong Kong’s investment in India do not show the complete picture, as bulk of the investments from Hong Kong are routed through other countries like Mauritius, due to preferential tax policy extended by India to these countries. Some of the important Hong Kong companies that have invested in India are CLP Power

International Ltd, Hutchison Telecommunications, Pacific Century Cyber Works, Hong Kong & Shanghai Banking Corporation, Standard Chartered Bank, Jardine Group of Companies, Noble Group, Wittis Group, Mandarin and other hotels, etc. Their investments are in sectors such as fuels (power), service sector (financial and non-financial), hotel and tourism, telecommunication (cellular, mobile/basic telephone services), manufacturing (garments, electronics), etc. About 30% of FII inflows into India are routed through Hong Kong.

7.2 India - China Economic Links

Trade Links

India and China resumed trade officially in 1978. In 1984, the two sides signed the Most Favoured Nation Agreement. With improving relations, trade and economic cooperation between India and China has grown rapidly in the last decade from US$264.8 million in 1991 to US$4.95 billion for 2002, which marks an increase by 37.5% over 2001. While Chinese exports increased by 40.8%, Indian exports to China rose by 33.7%.

India’s main exports to China in 2002 were iron and chrome ore, slag, ash, iron and steel products cotton yarn/fabric, organic chemicals, marine products, granite and marble stones, plastics, precious stones and inorganic chemicals, etc. China’s main exports to India included organic chemicals, metallurgical coke and coal, electrical and non-electrical machinery, TV picture tubes, silk yarn, manmade fabrics, Phosphates, etc.

Trends in India’s Exports to China

There has been an increase of almost 800% in India’s plastic exports to China between 1999 and 2000 and an increase of 130% between 2000 and 2001. China imports around US$14 billion worth of plastic and the scope for exports is huge. Use of plastic in China is of recent origin and there is great potential in this market. India's textile exports to China mainly include cotton textiles that comprise of cotton raw and cotton yarn, fabrics and made ups. There is a great

The official figures about Hong Kong’s investment in India do not show the complete picture, as bulk of the investments from Hong Kong are routed through other countries.



demand for synthetic and rayon fabrics in China. High quality cotton garments is also an area of opportunity for Indian exporters.

Statistics from India show a surge of 600% in Indian seafood & fish exports to China to US$84 million in 2000. At present, India takes the role of the third largest seafood & fish exporter to the Chinese market, next only to Russia and Japan. The potential lies in exploiting the high quality fish market e.g. prawn, shellfish etc. Live fish is another potential area.

Exports of hides and skins to China from India have been growing steadily over the past few years. It reached a figure of US$38.8 million in 2001 an increase of about 37% from 2000. There is, however, considerable scope to increase India’s leather exports to China if we adopt advanced technology for processing and finishing of rawhide. India ranked 14 in 2001. China consumes about 28 tons of gold annually and is a world leader in platinum consumption. China also accounts for 1.8% of the world’s diamond market. With an average annual growth of over 6%, China’s jewellery market is predicted to reach US$22 billion by 2010, accounting for 10% of the world market. In the first eleven months of 2002, China imported diamonds worth US$38 million. This is one of the potential areas for India, which in 2001-02 exported diamonds worth US$0.06 million to China.

Although steel exports from India to China stand at 200,000 tons, it is turning out to be a key export market for India. China has shown interest in imports from India. Indian companies like the Steel Authority of India, Essar Steel, Jindal Strips and Ispat are looking at China in a big way to expand their exports. The Indian Steel Alliance, working under the aegis of the Confederation of Indian Industry (CII), has already initiated talks with the Chinese government and steel companies in China to increase trade between the two countries.

China offers a huge market for stone imports (granite, marble, slate, etc.). India is one of the largest exporters of granite and other building material to China. The 2008 Olympics alone will be presenting a US$34 billion opportunity in terms of urban infrastructure and 37 new sports facilities. All this will make China a huge market, since 25% to 30% of decorative stones demand will have to be met by imports. In organic chemicals, India’s major item of export is Aluminium oxide. There is great potential in this area because of the fact that China imported organic chemicals worth US$8.327 billion in 2001.

Future Potential

Presently, India’s exports are concentrated in the low value-added sector whereas manufactured goods from India have yet to make a breakthrough in the Chinese Market. However, the areas wherein India can take advantage include export of iron ore, cotton yarn, organic chemicals, marine products, granite,

pharmaceutical and bulk drugs. The future potential for Indian exports is in the areas of high-grade steel, plastics, machine tools, agro-products, milk and

Presently, India’s exports are concentrated in the low value-added sector.



dairy products, automobile accessories, finished leather, software and precious stones.

Investment Links

The absorption of foreign investment in China is usually of the following kind: Sino-Foreign Joint Ventures; Sino-Foreign cooperative enterprises; Wholly-owned foreign enterprises and Cooperative development. Other ways of investment include compensation trade and processing & assembling. The Interim Regulations on FDI Directions and the Industrial Catalogue Guiding Foreign Investment were formulated and promulgated in China in June 1995. In December 1997, the State Development Planning Commission (SDPC), the State Economic and Trade Commission (STPC) and the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) revised the Industrial Catalogue Guiding Foreign Investment and enhanced the scope of investment in areas such as agricultural technology, energy, transportation and projects aimed at the development of the western and central regions of China.

Indian Businesses in China

Joint Ventures: Ranbaxy, Aurobindo Pharmaceuticals, Dr. Reddy’s Laboratories and NIIT. Wholly-owned ventures: Orissa Industries Ltd (Orind), Infosys, Essel Packaging and TCS. Representative Offices: Tata Exports, Torrent Group, Lupin Industries, Kanoria Chemicals and Industries, Raymond Ltd, Satyam Computer Services Ltd, Reliance Industries Ltd, Bry-air, Vam Organics, United Phosphorous, State Bank of India, Bank of India and Videocon. The total Indian investment in China till end-November 2002 was US$28.4 million.

Chinese Businesses in India

Major Chinese companies represented in India include China National Machinery Import and Export Corporation (engaged in selling technology for mini-blast furnaces), China Shougang International Trade and Engineering Corporation, China Petroleum Technology and Development Corporation, China Metallurgical Import and Export Corporation (CMIEC) and SINOCHEM (China National Chemical Import and Export Corporation). China Silk Corporation has opened a representative office in India. Konka and TCL, two Chinese consumer durable companies have set up joint ventures in India. Huawei Technologies has set up an R&D centre in Bangalore. Some automobile companies, particularly motorcycle companies are in the process of establishing joint ventures in India. Many Chinese companies have plans to open up representative offices in India and 2003 should see a greater influx. The total approved foreign investment of Chinese businesses in India till November 2002 is US$148.5 million.

Some of the Indian companies in China are: Ranbaxy, Aurobindo, Dr. Reddy’s, NIIT, Orind, Infosys, Essel, TCS, Tata, Lupin, Raymonds, Satyam, Reliance, etc.



7.3 Practical Business Tips

Business Tips for Hong Kong

Hong Kong is a metropolitan city and has a good mix of expatriate business community. However, there are some business practices, which are followed in general.

Business in Hong Kong is typically formal. Shaking hands and wearing formal business suits are norms. When interacting with Hong Kong business people, exchanging business cards is a customary first step. Business cards printed both in English and Chinese are preferred. Present business card with both hands. Look at the card for a moment before putting it in wallet or

purse. Meetings are always by appointment and punctuality is strictly maintained. The leader of the team normally leads the team to a venue and heads the discussion. For delegations, exchange of gifts is normal. Business luncheons are common. If the menu is discussed in advance, one can explain what one does not eat. Phrases like non-vegetarian can be interpreted widely and may include any kind of meat and seafood. Although English is used as a business language in Hong Kong, Cantonese Chinese is still the most widely used language, especially among Small and Medium Enterprises (SMEs). Interpreters, if required, can be hired on hourly basis.

Normal payment methods include Letter of Credit, open account, sight draft and documents against payments. Documents covering a shipment normally include an invoice, health certificate and bill of lading/airway bill. For airfreight shipment, exporter should send the documents to the importer as soon as the shipment is effected. Indian exporters should contact Hong Kong importers with offers quoting c.i.f. (cost, insurance and freight) or c.f. (cost and freight) prices preferably in US currency.

Additional Tips for China

Much of China’s business etiquette draws on its basic cultural values, such as respect for age and position and an orientation towards group goals rather than individualism. The following are some of the tips for doing business in China:

Chinese write their family name first. Hence, call them by the name that appears first after Mr./Ms. Chinese ask personal questions (this is done to seek common ground). The network of personal connections is very important in China. This is called ‘guanxi’. Good conversation topics include enquiry about family, Chinese culture, shopping and life in general. Topics to avoid include government, politics and Taiwan. The concept of "face" is important to understanding the Chinese. Be careful to avoid causing someone to "lose face" by insulting, criticising or embarrassing him or her in front of others, or by treating the person with less than the proper respect due to his status in the organisation. Part of Chinese negotiating strategy involves being an excellent host. One should not misinterpret this as an indication of their

Present business card with both hands. Look at the card for a moment before putting it in wallet.



attitude towards the individual or the project. The Chinese will not usually come out directly and say "no" to a proposal. They will find many indirect ways to reply. One may be greeted by a group of people with applause, such as when touring a factory. Returning the applause is the proper response.

Working lunches and dinners, which are usually fairly elaborate are not only common but are expected in China. Count on attending banquets arranged by the host. Return the favour if possible. At work meetings, seating will follow strict protocol, so let the host seat the guest. Drinking alcohol is considered friendly. (To

avoid it, citing a medical reason is considered the best bet). During a meal, wait for the host to make the first toast before drinking and then return the toast. Clean plate means one is still hungry. Gifts are important. For wrapping gifts, either red or golden colour wrapping paper may be used. Chinese do not open gifts when received and when given a gift do not open it unless insisted (However, in Hong Kong, the recipient is expected to open the gift). Foreign cigarettes, cognac, fine whisky, quality wine make fine gifts for Chinese. However, do not give clocks, cut flowers, white objects, for these objects are associated with death. Do not give food items for they suggest poverty (However, in Hong Kong, gifting food items is acceptable).

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At work meetings, seating will follow strict protocol, so let the host seat the guest.


8. Resources Key Contacts Online Resources

8.1 Key Contacts

Hong Kong Contacts

Featured Contacts Government Bureaux and Agencies Industry Associations Important Importers

.Featured Contacts. HONG KONG JEWELLERY & JADE MANUFACTURERS ASSOCIATION Flat A, 12/F, Kaiser Estate, Phase 1, 41 Man Yue Street, Hunghom, Kowloon, Hong Kong Phone: +852.2334.4311 Fax: +852.2764.1956 Email: [email protected] Web: http://www.jewellery-hk.org

The Hong Kong Jade & Stone Manufacturers Association was established in 1965. In 1997, the Association's name was changed to "Hong Kong Jewellery & Jade Manufacturers Association" (HKJJA). It sponsors local jewellery exhibitions and organises local jewellery manufacturers to participate in major overseas jewellery exhibitions. Besides, it organises seminars, training courses, talks and conferences in relate to the jewellery and jade industries. It establishes contacts with relevant government authorities and international organisations. It also helps developing the "Hong Kong Jewellery Technology Centre". Furthermore, it provides jadeite and gemstone identification services to the industry and the public through their subsidiary, the Hong Kong Jade & Stone Laboratory Ltd, provides Jewel CAD courses and rapid prototype services to the industry and provides up-to-date information on all aspects of the jewellery industry through publication of trade magazines. It promotes the members' products. Publications are compiled and distributed to buyers around the world and published through the internet. Their in-house production studio also provides related services such as graphic consultancy, professional photography and expert printing.

HONG KONG JEWELLERS' & GOLDSMITHS' ASSOCIATION LTD. 13/F., Hong Kong Jewellery Building, 178-180 Queens Road Central, Hong Kong

Part

8



Phone: +852.2543.9633 Fax: +852.2850.7361 Email: [email protected]

The Hong Kong Jewellers' & Goldsmiths' Association Limited was established in 1953. The services it provides include setting down the price of jewellery gold every day and notifying its members of such prices; submitting the representative views of the Association to the Government on legislative matters which affect the jewellery trade; holding regular meetings with the Crime Prevention Bureau of the Royal Hong Kong Police and circulating information on the latest security systems to its members; sponsoring/ organising jointly with the Hong Kong Trade Development Council in providing promotional activities concerning the jewellery trade and industry of Hong Kong; assisting the Hong Kong Tourist Association in assessing the genuineness of gems and diamonds; cooperating with the Hong Kong Consumer Council in dealing with consumers’ opinions in the jewellery trade. The Association also provides trade enquiry services, gold content testing services, seminars, recreational and cultural activities to its members.

HONG KONG JEWELLERY MANUFACTURERS' ASSOCIATION Unit G, 2/F, Kaiser Estate Phase 2, 51 Man Yue Street, Hung Hom, Kowloon, Hong Kong Phone: +852.2766.3002 Fax: +852.2362.3647 Email: [email protected] Web: http://www.jewelry.org.hk

Hong Kong Jewellery Manufacturers' Association was established in 1988. To help the jewellery manufacturers in Hong Kong, it increases the productivity of jewellery manufacturing and strengthens the ability of Hong Kong to compete with overseas manufacturers. It sets up close liaison among local manufacturers, exchanging ideas and tackling problems. Besides, it attains a more prestigious status for Hong Kong's jewellery industry and promotes the industry to overseas markets. It makes proposals on trade and industrial issues to appropriate authorities. It also provides better training opportunities for potential artisans. It gathers and provides trade and industrial information. It improves the relationships and promotes better understanding amongst jewellery manufacturers and between jewellery manufacturers and other members of the community. It prints and publishes periodicals, books, or leaflets about the activities of the Association.

HONG KONG JEWELLERY INDUSTRY TECHNOLOGY CENTRE 5/F, HKPC Building, 78 Tat Chee Avenue, Kowloon, Hong Kong Phone: +852.2788.5531 Fax: +852.2788.5522 Email: [email protected] Web: http://www.hkpc.org/hkjitc

The Hong Kong Jewellery Industry Technology Centre (HKJITC) was established in 1995, with funding support from the Industry and Technology Development Council of the Hong Kong Government. It is jointly managed by the Hong Kong Jewellery Manufacturers' Association (HKJMA) and the Hong Kong Productivity Council (HKPC). The major objective of the



HKJITC is to provide integrated support services to the local jewellery industry in order to enhance its market competitiveness and to extend its manufacturing capabilities. The HKJITC is based at the HKPC Building to monitor technology trends, develop technologies for strategic needs and disseminate relevant information and technologies to the jewellery industry.

THE INDIAN CHAMBER OF COMMERCE HONG KONG 2/F, Hoseinee House, 69 Wyndham Street, Central, Hong Kong Phone: +852.2523.38771 Fax: +852.2845.0300 Email: [email protected] Web: http://www.icchk.org.hk

The Indian Chamber of Commerce Hong Kong (ICCHK) was established on 12 December 1952. It is consulted by the Hong Kong Government on matters of importance in the areas of trade, commerce, shipping, and manufacturing. The Chamber deals with the trade and economic relationship between Hong Kong, Mainland China, and India, as well as other parts of the world. The Chamber is a founder member of the Hong Kong Shippers' Council. It is a member of the Council of Hong Kong Indian Associations. It works closely with the Consulate General of India to organise various trade promotional events and activities. ICCHK is a member of International Chamber of Commerce, Paris and Confederation of Asia Pacific Chambers of Commerce and Industry, Taipei. The current membership of around 500 comprises Indian businesses in Hong Kong, leading India-based private- and public-sector companies operating from Hong Kong, non-Indian companies and Indian professionals.

HONG KONG TRADE DEVELOPMENT COUNCIL 38/F, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong Phone: +852.2584.4066, +852.2584.4333 Fax: +852.2824.0249 Email: [email protected] Web: http://www.tdctrade.com

The Hong Kong Trade Development Council (HKTDC), a statutory body for promoting Hong Kong's trade, was established in 1966. It has 51 offices in 34 countries and regions. It is involved in Trade Enquiry Service (featuring 600,000 listings), accessible through its website. It owns the HK Convention and Exhibition Centre, and organises or co-sponsors major international trade shows in Hong Kong and overseas covering a wide range of consumer and industrial products. It also publishes more than 20 product/service magazines and trade directories, which have a combined worldwide circulation of more than two million. HKTDC appointed a private firm as its representative in Mumbai in early 2002.

HONG KONG GENERAL CHAMBER OF COMMERCE 22/F, United Centre, 95 Queensway, Hong Kong Phone: +852.2529.9229, +852.2823.1211 Fax: +852.2527.9843 Email: [email protected] Web: http://www.chamber.org.hk



The Hong Kong General Chamber of Commerce is the oldest (founded in 1861) and largest (around 4,000 corporate members) business organisation in Hong Kong. Its membership consists of multinational companies, Hong Kong companies and Mainland China companies, and a growing number of overseas associate and Mainland associate members. HKGCC has been a functional constituency representing Hong Kong’s business community in the Legislative Council since 1988. Their members elect the Chamber’s own representative to the 60-member Legislative Council every four years. Moreover, of the over 70 Hong Kong bodies and committees in which 64 Chamber members participate, half are official government advisory bodies, such as the Labour Advisory Board, Trade Advisory Board and Joint Liaison Committee on Taxation, etc.

CHINESE GENERAL CHAMBER OF COMMERCE 4/F, 24-25 Connaught Road, Central, Hong Kong. Phone: +852.2525.6385 Fax: +852.2845.2610 Email: [email protected] Web: http://www.cgcc.org.hk

The Chinese General Chamber of Commerce was founded in 1900. Presently it has a membership of over 6,000. The Chamber maintains close contacts with trade associations and Chinese chambers all over the world, in particular those in Mainland China. The Chamber has representatives in the Legislative Council, Hong Kong Monetary Authority, Information Technology and Broadcasting Bureau, and Education and Manpower Bureau. It is also represented on a number of boards and committees of various public and private bodies, including the Hong Kong Trade Development Council, the ICAC, the Hong Kong Food Council, the Hong Kong Shippers' Council, as well as the Manpower Development Committee and the Labour Advisory Board in the SAR government.

CHINESE MANUFACTURERS’ ASSOCIATION CMA Building, 64-66 Connaught Road, Central, Hong Kong Phone: +852.2545.6166 Fax: +852.2541.4541 Email: [email protected] Web: http://www.cma.org.hk

Established in 1934, the Chinese Manufacturers' Association of Hong Kong (CMA) has over 3,700 member-companies. The CMA liaises with international bodies as well as trade and industrial associations overseas for the exchange of information and ideas and for the promotion of trade, industrial progress, and to foster mutual understanding and cooperation. It is a member of the International Chamber of Commerce. The CMA also maintains close contact with consulates and trade commissions of overseas governments in Hong Kong.



.Indian PSUs in Hong Kong. AIR INDIA 01-02, 29/F, Vickwood Plaza, 199 Des Voeux Road, Central, Hong Kong Phone: +852.2522.4771 Fax: +852.2522.2261 Email: [email protected]

BANK OF BARODA (HONG KONG ) LTD 3/F Dina House, Ruttonjee Centre, 11 Duddell Street, Central, HK Phone: +852.2521.5166 Fax: +852.2868.4701 Email: [email protected]

BANK OF INDIA 2/F, Ruttonjee Centre, Duddell Street, Central, Hong Kong Phone: +852.2524.0186 Fax: +852.2810.6149 Email: [email protected]

INDIAN OVERSEAS BANK (IOB) 3/F, Ruttonjee House, 11 Duddell Street, Hong Kong Phone: +852.2522.7157 Fax: +852.2845.1549 Email: [email protected]

INDO-HONG KONG INTERNATIONAL FINANCE LTD 904, AON China Building, 29 Queensway Road, Central, Hong Kong Phone: +852.2529.1398 Fax: +852.2529.6036

STATE BANK OF INDIA Room No. 801-5 Wheelock House, 20 Pedder Street, Central, HK Phone: +852.2523.2887 Fax: +852.2868.1966 Email: [email protected]

UCO BANK Units 4102-06, 41/F, COSCO Tower, 183 Queen’s Road Central, HK Phone: +852.2524.9240 Fax: +852.2810.6954 Email: [email protected]

NEW INDIA ASSURANCE CO. LTD Man Cheong Building, 15-17 Wyndham Street, Central, Hong Kong Phone: +852.2523.9738 Fax: +852.2845.2133 Email: [email protected]

.Government Bureaux & Agencies. TRADE AND INDUSTRY DEPARTMENT 12/F, Trade and Industry Department Tower 700 Nathan Road Kowloon Phone: +852.2398.5556 Fax: +852.2380.8504 Email: [email protected]

NON-TEXTILE LICENSING UNIT Trade and Industry Department 12/F, Trade and Industry Department Tower 700 Nathan Road Kowloon Phone: +852.2398.5560, 2398.5486 (D) Fax: +852.2380.8504 Email: [email protected]

.Industry Associations. HONG KONG JADE & STONE MANUFACTURERS ASSOCIATION 16/F, Hang Lung House, 184-192 Queens Road Central, Hong Kong Phone: +852.2543.0543 Fax: +852.2815.0164

HONG KONG JEWELLERS' & GOLDSMITHS' ASSOCIATION LTD. 13/F., Hong Kong Jewellery Building, 178-180 Queens Road Central, Hong Kong Phone: +852.2543.9633 Fax: +852.2850.7361 Email: [email protected]

HONG KONG JEWELLERY MANUFACTURERS' ASSOCIATION Unit G, 2/F, Kaiser Estate Phase 2 51 Man Yue Street Hung Hom, Kowloon, Hong Kong Phone: +852.2766.3002 Fax: +852.2362.3647 Email: [email protected] Web: http://www.jewelry.org.hk

DIAMOND FEDERATION OF HONG KONG, CHINA LTD 5B, HK Diamond Exchange Building 8-10 Duddell Street Central, Hong Kong Phone: +852.2524.5081 Fax: +852.2877.9831 Email: [email protected] Web: http://www.diamondfederationhk.cm



HONG KONG & KOWLOON JADE MERCHANTS UNION ASSOCIATION 17/F, Man Fai Building 38 Man Ying Street Ferry Point, Kowloon Phone: +852.9032.9009 Fax: +852.2388.5388

HONG KONG JEWELLERY INDUSTRY TECHNOLOGY CENTRE 5/F, HKPC Building 78 Tat Chee Avenue Kowloon Hong Kong Phone: +852.2788.5531 Fax: +852.2788.5522 Email: [email protected] Web: http://www.hkpc.org/hkjitc

HONG KONG JEWELLERY & JADE MANUFACTURERS ASSOCIATION Flat A, 12/F, Kaiser Estate Phase 1, 41 Man Yue Street Hunghom Kowloon Phone: 852-23344311 Fax: 852-27641956 Email: [email protected] Web: http://www.jewellery-hk.org

.Important Importers. ISE SHINJU Shop BW-5, The Peninsula Hotel Shopping Arcade, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2722.0870 Fax: +852 2723.8039 Email: [email protected]

TSE SUI LUEN JEWELLERY CO LTD G/F, Summit Building, 30 Man Yue Street, Hunghom, Kowloon, Hong Kong Phone: +852 2333.4221 Fax: +852.2764.5980 Email: [email protected] Web: http://www.tsljewellery.com

ISE JEWELLERY CO LTD Shop Ml11, Me11 & 13, M/F, The Peninsula Hotel Shopping Arcade, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2366.6561 Fax: 852.2721.0415 Email: [email protected]

HONG KONG JEWELLERY CO LTD G/F - 3/F, Wah Ming Building, 34 Wong Chuk Hang Road, Wong Chuk Hang, Hong Kong Phone: +852.2873.2618 Fax: +852.2873.4945 Email: [email protected]

C S S JEWELLERY CO LTD Unit 605-6, 6/F, Tower 1, Cheung Sha Wan Plaza, 833 Cheung Sha Wan Road, Cheung Sha Wan, Kowloon, Hong Kong Phone: +852.2745.3111 Fax: +852.2785.5347 Email: [email protected] Web: http://www.cssjewellery.com

BRIO JEWELLERY CO LTD Flat 1A, 1/F, Fook Shing Industrial Building, 1A Yuk Yat Street, To Kwa Wan, Kowloon, Hong Kong Phone: +852.2363.9038 Fax: +852.2765.6688 Email: [email protected]

GOLAY BUCHEL & CO (HK) LTD Room 2203, 22/F Tower 1, Admiralty Centre, 18 Harcourt Road, Central, Hong Kong Phone: +852.2861.1162 Fax: +852.2529.9681 Email: [email protected] Web: http://www.golay.com

WOO LEUNG LEE JEWELLERY COMPANY LTD Room 1902-5, 19/F, Arion Commercial Centre, 2-12 Queen's Road West, Sheung Wan, Hong Kong Phone: +852.2548.8191 Fax: +852.2858.493 Email: [email protected] Web: http://www.wooleunglee.com

CONTINENTAL JEWELLERY (MFG) LTD Unit M & N, 1/F Phase 3, Kaiser Estate, 11 Hok Yuen Street, Hunghom, Kowloon, Hong Kong Phone: +852.2363.8882 Fax: +8522765.7516 Email: [email protected] Web: http://www.continental.com.hk

EMPEROR WATCH & JEWELLERY (HK) CO LTD 25/F, Emperor Group Centre, 288 Hennessy Road, Wan Chai, Hong Kong



Phone: +852.2522.2918 Fax: +852.2891.6286

NUANCE-WATSON (HK) LTD PARTNERSHIP Suite 601-604, One Citygate, 20 Tat Tung Road, Tung Chung, Hong Kong Phone: +852.2870.6777 Fax: +852.2555.8848

LVMH ASIA PACIFIC LTD 34/F, Dorset House, 979 King's Road, Taikoo Place, Quarry Bay, Hong Kong Phone: +852.2968.9288 Fax: +852.2968.9222 Email: [email protected] Web: http://www.lvmh.fr

CHARLOTTE HORSTMANN & GERALD GODFREY LTD Room 042, Marine Deck, Ocean Terminal, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2465.8176 Fax: +852.2730.9412

SHIATOS LTD 4/F, HK Diamond Exchange Building, 8-10 Duddell Street, Central, Hong Kong Phone: +852.2521.2383 Fax: +852.2845.0271 Email: [email protected]

HANG FUNG GOLD TECHNOLOGY LTD 2/F, Phase 2, Kaiser Estate, 28 Man Lok Street, Hunghom, Kowloon, Hong Kong Phone: +852.2766.3688 Fax: +852.2362.3034 Email: [email protected] Web: http://www.hangfung.com

THE WORLD JEWELLERY CO LTD 6/F, 625 King's Road, North Point, Hong Kong Phone: +852.2590.3333 Fax: +852.2590.3456 Email: [email protected] Web: http://www.theworld.com.hk

GUCCI GROUP (HONG KONG) LTD Room 4001, 40/F, The Lee Gardens, 33 Hysan Avenue, Causeway Bay, Hong Kong Phone: +852.2839.6900 Fax: +852.2504.5913

WING FUNG GOLD & JEWELLERY WHOLESALE LTD Room 601-604, 6/F, Hilder Centre,

2 Sung Ping Street, Hunghom, Kowloon, Hong Kong Phone: +852.2320.1788 Fax: +852.2356.9088 Email: [email protected] Web: www.hkenterprise.com/wingfung

L S COLLECTION HONG KONG LTD Unit D, 4/F, Garment Centre, 576-586 Castle Peak Road, Cheung Sha Wan, Kowloon, Hong Kong Phone: +852.2528.9303 Fax: +852.2865.0909 Email: [email protected]

DICKSON CONCEPTS (INTERNATIONAL) LTD 4/F, East Ocean Centre, 98 Granville Road, Tsim Sha Tsui East, Kowloon, Hong Kong Phone: +852.2311.3888 Fax: +852.2311.3323

IMAGINEX MANAGEMENT CO LTD Address: Suite 2801-7, Natwest Tower, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong Phone: +852.2730.1122 Fax: +852.2376.1729 Email: [email protected]

DICKSON CONCEPTS (WHOLESALE) LTD 4/F, East Ocean Centre, 98 Granville Road, Tsim Sha Tsui East, Kowloon, Hong Kong Phone: +852.2311.3888 Fax: +852.2311.3323

MAN SANG JEWELLERY CO LTD 21/F, Railway Plaza, 39 Chatham Road South, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2317.5300 Fax: +852.2317.5243 Email: [email protected] Web: http://www.man-sang.com

ALFRED DUNHILL ASIA PACIFIC LTD 19/F Natwest Tower, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong Phone: +852.2599.6300 Fax: +852.2506.1251

BANGKOK GEM HOUSE (HK) Unit 4, 10/F Block B, Burlington House, 90-94C Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2799.9314 Fax +852.2730.3115 Email: [email protected]



Web: http://www.gemkey.com/gemhouse

THE UNITED TRADING CORPORATION Address: Flat B, 4/F, Bo Yip Building, 6 Ashley Road, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2376.0530 Fax: +852.2376.3910 Email: [email protected]

RIGHT GEMS SUPPLIER Flat A, 16/F, Alpha House, 27-33 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2311.0055 Fax: +852.2721.1655 Email: [email protected]

FANCY GEMS Flat 11A, 10/F, Haiphong Mansion, 99-101 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2316.7560 Fax: +852.2316.7991 Email: [email protected]

H T B TRADING COMPANY 1/F, 2 Earl Street, Kowloon City, Kowloon, Hong Kong Phone: +852.2338.8711 Fax: +852.2339.0601

ORO EIGHTEEN JEWELLERY CO LTD Flat A, 3/F, Wai Hang Building, 308 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2735.0770 Fax: +852.2377.9867

ASIA JEWELLERY MFG CO O/B ORO EIGHTEEN JEWELLERY CO LTD Flat A, 3/F, Wai Hang Building, 308 Carton Road, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2735.0770 Fax: +852.2377.9867

TAI WOO PEARL (HK) CO LTD Flat B, 13/F, China Insurance Building, 48 Cameron Road, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2311.3369 Fax: +852.2722.7498 Email: [email protected] Web: http://www.taiwoopearl.com

H.K. GEMS & DIAMONDS Block D, 11/F, Comfort Building, 86-88 Nathan Road, Tsim Sha Tsui, Kowloon, Hong Kong

Phone: +852.2367.6747 Fax: +852.2367.2798

PANIV DIAM P O Box 96202, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2721.6861 Fax: +852.2721.5369 Email: [email protected]

CROWN GEMS P O Box 92129, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2311.5588 Fax: +852.2724.1427 Email: [email protected]

INDO SINO CO Flat D, 10/F, Dorfu Court, 5-6 Hau Fook Street, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2724.8289 Fax: +852.2724.8735 Email: [email protected]

ORIENTAL GEMS COMPANY Unit 21, 10/F, Block B, Focal Industrial Centre, 21 Man Lok Street, Hunghom, Kowloon, Hong Kong Phone: +852.2356.1186 Fax: +852.2954.2625

COME-MORE COMPANY Room 2A, Pine Hill Mansion, 128 Austin Road, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2314.7280 Fax: +852.2314.1005 Email: [email protected]

MAGFREY CO LTD Room 1111, 11/F, Peninsula Square, 18 Sung On Street, Hung Hom, Kowloon, Hong Kong Phone: +852.2524.2175 Fax: +852.2877.2118 Email: [email protected]

PO FUNG JEWELLERY Room 803, 8/F, Wah Ying Cheong Central Building, 158-164 Queen's Road Central, Central, Hong Kong Phone: +852.2545.8289 Fax: +852.2544.1971

CHINESE ARTS & CRAFTS (HK) LTD 7/F, China Resources Building,



26 Harbour Road, Wan Chai, Hong Kong Phone: +852.2839.1888 Fax: +852.2577.5063 Email: [email protected] Web: http://www.crcretail.com

CHRISTIAN DIOR FAR EAST LTD 20/F, Dorset House, 979 King's Road, Taikoo Place, Quarry Bay, Hong Kong Phone: +852.2968.9668 Fax: +852.2968.1580 E-mail: [email protected]

BURBERRY ASIA LTD Room 1101-2, Tower 2, Harbour Centre, 8 Hok Cheung Street, Hunghom, Kowloon, Hong Kong Phone: +852.2736.0388 Fax: +852.2736.2339

COZZI INTERNATIONAL LTD Room 911-917, Tower A, New Mandarin Plaza, 14 Science Museum Road, Tsim Sha Tsui, Kowloon, Hong Kong Phone: +852.2301.3388 Fax: +852.2301.3099 Email: [email protected]

KWOK HANG HOLDINGS LTD Room 1001-1002, Tower 2, Harbour Centre, 8 Hok Cheung Street, Hunghom, Kowloon, Hong Kong Phone: +852.2735.0131 Fax: +852.2735.4272 Email: [email protected]

GAY GIANO INTERNATIONAL GROUP LTD Unit 701 & 702, Grandtech Centre,

8 On Ping Street, Siu Lek Yuen, Sha Tin, New Territories, Hong Kong Phone: +852.2316.6800 Fax: +852.2635.6060 Web: http://www.gaygiano.com

SHIAMAS LTD 4/F, Hong Kong Diamond Exchange Building, 8-10 Duddell Street, Central, Hong Kong Phone: +852.2523.3178 Fax: +852.2845.0268 Email: [email protected]

G R I HONG KONG LTD 27/F Tower A, Regent Centre, 63 Wo Yi Hop Road, Kwai Chung, New Territories, Hong Kong Phone: +852.2489.8282 Fax: +852.2420.2224 Email: [email protected]

TOPPY CO (HK) LTD 11/F, Toppy Tower, 659 Castle Peak Road, Kwai Chung, New Territories, Hong Kong Phone: +852.2489.8559 Fax: +852.2484.1219 Email: [email protected] Web: http://www.colour18.com

ERRAGAMO RETAIL HK LTD Suite 3312-3314, Shell Tower, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong Phone: +852.2737.3028 Fax: +852.2377.1716 Email: [email protected]

Key Contacts

Mainland China Contacts EMBASSY OF INDIA Commercial Wing 1, Ritan Dong Lu, Beijing – 100 600 Phone: +86.10.6532.3291 Fax: +86.10.6532.4684 Email: [email protected] Web: http://www.indianembassy.org.cn

CHINA COUNCIL FOR PROMOTION OF INTERNATIONAL TRADE No.1 Fuxingmenwai Street Beijing-100860, P.R. China

Phone: +86.10.6801.3344 (Operator), +86.10.6803.4830 Fax: +86.10.6803.0747, 6801.1370

CHINA NATIONAL ARTS AND CRAFTS CORP. No. 101 Fuxingmen Nei Dajie, Beijing 100031 Phone +86.10.6601.2255 Ext 3817/3820 Fax: +86.10.6603.3964



GEMMOLOGICAL ASSOCIATION OF CHINA EXHIBITION CO. LTD Room No: 602 A5 West Yuetan Street, Xicheng dist., Beijing: 100045 Phone: +86.10.6804.0679 Fax: +86.10.6804.5040

SHENZHEN CLOCKS, WATCHES & ACCESSORY MARKET CO., LTD Phone: +86.755.323.9797, 334.6211

Fax: +86.755.335.2739, 322.8663 Email: [email protected]

MUNICH TRADE FAIRS CONSULTANCY (SHANGHAI) CO., LTD Phone: +86.21.6886.3366 Ext. 804 Fax: +86.21.6886.2267 Email: zhang,[email protected]

Key Contacts

India Contacts

Government ministries and agencies Industry associations General trade associations

Government Ministries and Agencies. DEPARTMENT OF COMMERCE Joint Secretary (FT-NEA) Udyog Bhavan New Delhi 110011 India Phone: +91.11.2301.5215 Fax: +91.11.2301.4418

MINISTRY OF FINANCE Department of Economic Affairs Room No. 66-B, North Block New Delhi 110011 Phone: +91.11.2301.1247 Fax: +91.11.2301.2477 / 2379.3422

INDIA TRADE PROMOTION ORGANISATION Pragati Bhavan, Pragati Maidan New Delhi 110001 Phone: +91.11.2337.1540 / 2337.1836 Fax: +91.11.2331.8142 / 2331.7896 Email: [email protected] Web: http://www.indiatradepromotion.org

DTE. GENERAL OF FOREIGN TRADE Udyog Bhavan H-Wing, Gate No. 2 New Delhi 110011 Phone: +91.11.2301.1777 Fax: +91.11.2301.4436 Email: [email protected] Web: http://dgft.delhi.nic.in

.Industry Associations. THE GEM & JEWELLERY EXPORT PROMOTION COUNCIL Diamond Plaza 5th Floor, 391-A Dr. Dadasaheb Bhadkamkar Marg, Mumbai 400004 Phone: +91.22.2382.1801 / 1806 / 23806916 Fax: +91.22.2380.8752 / 2380.4958 Email: [email protected] Exhibition Cell: [email protected] Web: http://www.gjepc.org

REGIONAL OFFICES DELHI F-17-18, Flatted Factories Complex, Jhandewalan, New Delhi - 110055. Phone: +91.11.2361.4197 / 2351.5395 Fax: +91.11.2367.5274 Email: [email protected]

JAIPUR Rajasthan Chamber Bhavan, 3rd Floor Mirza Ismail Road, Jaipur - 302 001. Phone: +91.141.2568.029/2565.731 Fax: +91.141.2567.921 Email: [email protected]

CHENNAI Ankur Plaza, 3rd Floor, 52 G. N. Chetty Road T. Nagar, Chennai - 600 017 Phone: +91.44.28276188



Fax: +91.44.2822.6686 Email: [email protected]

KOLKATA Unit No. 1F, 1st Floor 4, Ho-chi-Minh Sarani, Kolkata - 700071 Phone: +91.33.2282.3630 Fax: +91.33.2282.3629 Email: [email protected]

SURAT 626-628 Belgium Tower, 6th Floor Ring Road, Surat - 395003 Phone: +91.261.7435.008 Email: [email protected]

PROJECT OFFICES JEWELLERY PRODUCT DEVELOPMENT CENTRE, MUMBAI D-15, Commerce Centre, Tardeo, Mumbai - 400034 Phone: +91.22.2492.1527 Fax: +91.22.2496.6498 Email: [email protected]

INDIAN GEMMOLOGICAL INSTITUTE, DELHI F 32-33 Flatted Factories Complex, Jhandewalan Rani Jhansi Road, New Delhi -110055. Phone: +91.11.2367.9732 Fax: +91.11.2367.5274 Email: [email protected]

JEWELLERY PRODUCT DEVELOPMENT CENTRE, DELHI F Block, Flatted Factories Complex, Jhandewalan, New Delhi -110055. Phone: +91.11.2353.9063 Fax: +91.11.2355 1186 Email: [email protected]

GEM TESTING LABORATORY, JAIPUR Rajasthan Chamber Bhavan, Mirza Ismail Road Jaipur - 302001. Phone: +91.141.2568.221 Email: [email protected]

JEWELLERY PRODUCT DEVELOPMENT CENTRE, JAIPUR Rajasthan Chamber Bhavan, 3rd Floor Mirza Ismail Road, Jaipur -302001 Phone: +91.141.2570.439 Fax: +91.141.2567.921 Email: [email protected]

INDIAN DIAMOND INSTITUTE, SURAT Katargam, GIDC Sumul Dairy Road, Surat – 395 008 Phone: +91.261.7480.809 / 7481.822 Fax: +91.261.7481.110 Email: [email protected] Web: http://www.diamondinstitute.ac.in

.General Trade Organisations. ASSOCIATED CHAMBERS OF COMMERCE AND INDUSTRY OF INDIA 147 B, Gautam Nagar Gulmohar Enclave New Delhi 110049 Phone: +91.11.2651.2477-79 Fax: +91.11.2651.2154 Email: [email protected] Web: http://www.assocham.org

CONFEDERATION OF INDIAN INDUSTRY (CII) 23 Institutional Area, Lodi Road New Delhi 110003 Phone: +91.11.2462.9994 Fax: +91.11.2463.3168 / 2462.6149 Email: [email protected] Web: http://www.ciionline.org

FEDERATION OF INDIAN CHAMBERS AND COMMERCE OF INDUSTRY Federation House Tansen Marg New Delhi 110001 Phone: +91.11.2373.8760 (11Lines) Fax: +91.11.2332.0717 / 2312.1504 Email: [email protected] Web: http://www.ficci.com

CONFEDERATION OF 100% EXPORT UNITS PHD House, 4th Floor, Opp. Asian Games Village New Delhi 110016 Phone: +91.11.2683 0743

FEDERATION OF INDIAN EXPORTS ORGANISATION PHD House (3rd floor) Opp Asian Games Village New Delhi 110016 Phone: +91.11.2685.1310 / 2685.1312 Fax: +91.11.2686.3087 Email: [email protected] Web: http://www.fieo.com



8.2 Online Resources

In addition to the website address provided in the previous pages, a select list of websites for further information is provided below:

Consulate General of India, Hong Kong http://www.indianconsulate.org.hk

Embassy of India, Beijing http://www.indianembassy.org.cn

Hong Kong Special Administrative Region Government http://www.info.gov.hk/eindex.htm

Indian Chamber of Commerce Hong Kong http://wsww.icchk.org.hk

Hong Kong Jewellery Manufacturers’ Association http://www.jewelry.org.hk

Diamond Federation of Hong Kong, China Ltd http://www.diamondfederationhk.com

Hong Kong Jewellery Industry Technology Centre http://www.hkpc.org/hkjitc

Hong Kong Jewellery & Jade Manufacturers Association http://www.jewellery-hk.org

Industry Vertical: Timepieces, Jewellery and Optical Goods http://timepieces.tdctrade.com

Hong Kong General Chamber of Commerce http://www.chamber.org.hk

Chinese General Chamber of Commerce http://www.cgcc.org.hk

Chinese Manufacturers’ Association http://www.cma.org.hk

Hong Kong Trade Development Council http://www.tdctrade.com

South China Morning Post http://www.scmp.com

Sea cargo tracking facility http://www.schednet.com/tdc/seatrak.htm

Air cargo tracking facility http://www.schednet.com/tdc/seatrak.htm

Real time flight info for Hong Kong airport http://www.hkairport.com/eng/flight_info/FlightInfoFrame.jsp

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