gem n jewel

8/7/2019 GEM N JEWEL

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INDIAN GEMS ANDJEWELLERY INDUSTRY

BY:

Abhinav Katiyar A1802009181

Saurabh Maurya A1802009205

Akash Agarwal A1802009207

Submitted To :

Ms. Alka Maurya


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GEMS AND JEWELS SCENARIOy In ancient times people made jewelry out of natural materials like seeds,

feathers, leaves, berries, fruits, flowers, animal bones, claws and teeth.

y The early people made jewelry not only for humans but also for the gods and

decorating animals like elephants and horses, on special occasions.

y It is interesting to note that both men and women of ancient times worejewelry made of gold, silver, copper, ivory and precious and semi-precious

stones.

y We find the description of jewelry in the great epics, the Ramayana and the

Mahabharata and also in the code of Manu that defines various duties of thegoldsmith.

y As a result of this old tradition India has been a leading exporter of gemstones

and manufactured jewelry.


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INDIAN SCENARIOy Till 1725, India was the only producer of diamonds in the world.

y India has a long history of diamond mining and several diamonds,

including the Kohinoor.

y The Golconda mines were world-famous and even today, aGolconda diamond fetches a very high price in the international

market.

yToday diamonds are mined only at Panna in the Indian state ofMadhya Pradesh and in Andhra Pradesh by the National Mining

Development Corporation.

y India does not contribute much to the world market in terms of

rough diamonds.


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INDIAN SCENARIO India is already the largest diamond cutting and

polishing centre in the world. The Indian diamond cutting and polishing industry

enjoys 60 per cent value share, 82 per cent carat share

and 95 per cent share of the world market in terms of

number of pieces.

Nearly 9 out of 10 diamonds sold worldwide are cut

and polished in India.

Large market for Gems & Jewellery with domestic salesof over $10 billion.

4% of the global Gems and Jewellery market .

Exports of over $15.5 billion; over 18% of Indias

exports.


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Classification of Gems &

Jewellery


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PRODUCTION CENTRES


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DOMESTIC INDUSTRY (GOLD) From historic times, gold has played a pivotal role in the Indian social

fabric.

Gold jewellery is very popular among farmers, with an upsurge ingold sales after a good agricultural season.

Buying of gold is an important part of every stage of an Indiancitizen's life-at birth, marriage, construction of home, festivals,religious ceremonies, setting up of new business, and death.

India is the largest consumer of gold in the world.

India is also estimated to hold nearly 14,000 tones of gold,accounting for 9% of the world's cumulative mine production ofaround 153,000 tones.


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Total Gold Jewellery Demand

in India

Source : Report Compiled by WGC available at

http://www.gold.org/download/rs_archive/India_heart_of_gold_Revival_10_Nov_2010.pdf


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Total Gold Jewellery

Consumption in India

Source : Report Compiled by WGC available at

http://www.gold.org/download/rs_archive/India_heart_of_gold_Revival_10_Nov_2010.pdf


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DOMESTIC INDUSTRY (DIAMOND)

The Indian domestic diamond jewellery market isestimated at around Rs. 80 billion per annum inretail value.

Because of increased disposable income andaggressive promotion strategies by the diamondindustry, Indian diamond jewellery demand hasincreased significantly.

Nearly 9 out of 10 diamonds sold worldwide arecut and polished in India.


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Destination-wise Exports of

Cut and Polished Diamonds2006 2007 2008-09 2009-10

USD (MLN)

Hong Kong 3,201.07 3,276.88 4,760.03 5,484.68

US 2,613.97 2,498.80 2,823.59 3,183.07Belgium 1,444.38 1,440.95 1,817.75 1,561.06

Singapore 1,199.75 112.58 348.91 339.44

UAE 1,107.47 1,189.09 3,558.31 5,340.13

Israel 807.48 869.32 808.30 739.97Japan 434.81 371.71 239.71 217.01

Thailand 282.92 294.47 258.52 265.04

Switzerland 115.49 97.69 119.69 65.37

Source : Compiled by DOC in EIDB at http://commerce.nic.in/eidb/ecomcnt.asp


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Source-wise Imports of Cut

and Polished Diamonds2006-07 2007-08 2008-09 2009-10

USD(MLN)

Belgium 3,312.89 3,017.47 4,056.75 4,556.77

Hong Kong 907.50 896.53 4,474.81 2,930.59

Israel 497.03 448.88 612.60 667.84

UAE 727.85 1,048.65 4,286.55 5,504.79

UK 1,316.02 1,190.54 1,059.51 792.18

USA 352.72 281.63 794.15 750.51

Source : Compiled by DOC in EIDB at http://commerce.nic.in/eidb/Icomcnt.asp


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Platinum Jewellery

India's share in the global platinum Jewellery market is

growing by 19 per cent annually, it continues to be less

than one per cent in the global platinum Jewellery market.

As per the Platinum Guild International (India), the number ofoutlets selling platinum Jewellery increased from 12 in 2000-

01 to over 300 currently. It is predicted that the number of

outlets selling platinum Jewellery would increase to around

1,000 outlets in the next 2-3 years


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Jewellery

The Indian jewellery market is one of the largest in the world,

with a market size of $13 billion. It is second only to the US

market of $ 40 billion and is followed by China at $11 billion.

The gold jewellery market is growing at 15 per cent per annum

and the diamond jewellery market at 27 per cent per annum.

The current global costume Jewellery and accessories

market is estimated at US$ 16.3 billion, of which India

only exports around US$ 53 million, thereby, providing a

huge opportunity area for the Indian costumemanufacturers.

The branded jewellery market in India is estimated at$111.6 million per annum


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TOP 10 EXPORTDESTINATIONSOF INDIAN GEMS& JEWELLERY

6,253.31

4,740.33

12,524.64

1,645.32753.22

255.9 309.65

597.36349.59 434.8

Export n U D

Hong Kong

USA

UAE

g u

a

apan

ha andS ngapo

UK

Ch na

Source :DOC EIDB http://commerce.nic.in/eidb/ecomcnt.asp


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The 10 major players in Indian

Gems and Jewellery Segment

Source: Compiled by ARB in report Outlook for Indian Gems and Jewellery Sector

available at http://www.assocham.org/arb/aep/AEP-GJ%20_2_April2009.pdf


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Export Trends for Last 3 Years


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Source : Compiled By GJEPC available athttp://www.gjepc.org/pdf/Current_updates/Export_March_2010_Detail.pdf


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Source : Compiled By GJEPC available at

http://www.gjepc.org/pdf/Current_updates/Exports_of_Gems_and_Jewellery_for_April_08__March_09_Detail_.pdf


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Highlights of NewForeignTrade Policy for the year 2009-

2014 with respect to Gems & JewellerySector

Import of gold of 8 k and above is allowed under

replenishment scheme subject to import being accompanied

by an Assay Certificate specifying Purity, weight and alloy

content.

Duty Free Import Entitlement (based on FOB value of exportsduring previous financial year) of Consumables and Tools, for:

o Jewellery made out of:

Precious metals (other than Gold & Platinum) 2%

Gold and Platinum 1% Rhodium finished Silver 3%

o Cut and Polished Diamonds 1%


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Contd Duty free import entitlement of commercial samples shall be Rs. 300,000.

Duty free re-import entitlement for rejected jewellery shall be 2% ofFOB

value of exports.

Import of Diamonds on consignment basis for Certification/ Grading & re-

export by the authorized offices/agencies of Gemmological Institute of

America (GIA) in India or other approved agencies will be permitted. Personal carriage of Gems & Jewellery products in case of

holding/participating in overseas exhibitions increased to US$ 5 million and

to US$ 1 million in case of export promotion tours.

Extension in number of days for re-import of unsold items in case of

participation in an exhibition in USA increased to 90 days. In an endeavour to make India a diamond international trading hub, it is

planned to establish Diamond Bourse (s).

With an objective to meet the Dollar Credit needs of exporters, a

Committee has been constituted with Finance Secretary, Commerce

Secretary and Chairman IBA.


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Advance Authorizations necessitate exports with a

minimum value addition of

Item of Export Minimum Value Addition

Plain gold / platinum / silver jewellery and 3%

Articles and ornaments like Mangalsutra

containing gold and black beads / imitation

stones, except in studded form of jewellery.

All types of Studded gold / platinum / silver 5%

Jewellery and articles thereof.

Any jewellery / articles manufactured by fully 1.5%

mechanised process

Gold / silver / platinum medallions & coins 1.5%(excluding coins of nature of legal tender)

Gold / silver / platinum findings / mountings 2.25%

manufactured by mechanised process


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SEZs in Gems and Jewellery

Sector Santacruz Electronics Export Processing Zone (SEEPZ) Manikanchan SEZ, W. Bengal

Jaipur SEZ

Surat Special Economic Zone

Surat in Gujarat, which is home to thousands of diamond units

with lakhs of diamond workers, has been recognized as Town

of Export Excellence.


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QUALITY STANDARDS

The Bureau of Indian Standards has launched its hallmarking scheme.

Hallmarking is the benchmark regarding the purity of input used in the

product.

The various other institute facilitating GEMS AND JEWELLERY are: G.I.A. - Gemological Institute Of America

A.G.S. - American Gem Society

E.G.L. - European Gemological Laboratory

I.G.I. - International Gemological Institute


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Quick Gold Hallmark Guide

.999 = 24 carat = 99.9%

.916 = 22 carat = 91.6%.750 = 18 carat = 75%

.585 = 14 carat = 58.5%

.375 = 9 carat = 37.5%

The hallmark is only applied after the item has

been assayed to determine that its purity conforms not

only to the standards set down by the law but also and

with the makers claims as to metallurgical content.


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KEY ISSUES FOR THE SECTOR

y Large Presence of Unorganized Sector

yThe bulk of the GJ industry in India is concentrated in the unorganized sectorand employs around 2 million workers serving over 0.1 million gold jewellersand over 8,000 diamond jewellers.

y The centre of India's GJ industry is Mumbai. Most imports of gold and roughdiamond arrives in Mumbai. However, most of the processing of diamonds takes

place in the neighboring state of Gujarat, mostly in Surat, Bhavnagar,Ahmedabad, Bhuj, and Navasari.

y Laser technology was introduced in the early-1990s for operations like cleavingand sawing. More than 500 such machines are estimated to be in operation inIndia, thereby enhancing production efficiency and quality.

y Indian companies are now venturing into processing of larger and expensivestones. While incredibly precise, computerized machinery is now used in someparts of the cutting process for some diamonds, most of the work is stillperformed by hand using exacting and meticulous techniques.


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y Limited Potential for Greater Value Addition in Gold Jewellery

y

In India, jewellery consumption is primarily of gold.

y Gold jewellery is fabricated mainly in 22-carat gold and, lower carat age is

not favored as the Indian mindset does not accept low purity gold jewellery.

y The bargaining power of the buyer is typically limited to the fabricationcharges.

y A jeweler or goldsmith of reasonable standing in a local area has a fixed and

loyal clientele.

y The system of hallmarking is expected to increase the buyer's confidence in

the jewellery's purity.

y Hallmarking of gold is mandatory from January 1, 2008.



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y Possible Long-term threat from China

y Although India currently enjoys dominance in the world's cut and polished diamonds

market, China may emerge as a viable rival, if not in the near term, certainly in thelonger term.

y An increasing number of diamond processors from Israel and Belgium, and even India,are setting up facilities in China, for a variety of reasons: The labor force, like in India, is cheap and disciplined;

High economic growth over the past decade has resulted in a significant increase in potentialconsumers in the high-income segment within the country; by comparison, India has to relyalmost solely on exports;

Quality of Chinese workmanship is steadily improving.

y China has rapidly become the world's second largest diamond manufacturing centre,when measured in manpower terms.

y Technology is another area where the Indian industry faces a long-term threat fromChina.

y China with its modern and automatic factories is today in a similar position tomanufacture jewellery at competitive prices.



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y Threat from Polishing in Producing Nations

y There has been increased political pressure by major diamond producingcountries in Africa-Botswana, Angola, Namibia and South Africa-to gain

further economic benefits from diamond production through jobs creation

in a domestic cutting and polishing industry.

yMost of these countries have no history of diamond polishing but the skillscan be taught as has been seen by the recent rapid growth of jobs in other

non-traditional centers such as the Far East and Armenia.

y The pressure towards polishing in the producing countries is growing and

increasingly it is a part of the overall agreement permitting mining, or of notimposing high taxes.

y The Indian diamond industry has thrived because for economic reasons,

most smaller stones cannot be profitably cut in higher cost locations.



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BIBLIOGRAPHY

yData Compiled By GJEPC available at

http://www.gjepc.org/statistics.aspx

yA Report India : Heart of Gold by WGC

yData Compiled by DOC in EIDB available at

http://commerce.nic.in/eidb/Icomcnt.aspyA report Outlook for Indian Gems and Jewellery

Sector by ASSOCHAM Research Bureau


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Swiss brands invited to set

up shop in India Union Commerce and Industry Minister Anand Sharma on Thursday invitedleading Swiss brands, including Rolex, Raymond Weil, Tissot, Chopard,

Blancpain and Tag Heur, to invest in India and set up manufacturing base in

the country to spread their influence as retail chains. The delegation

assured Mr. Sharma that they were excited about the prospects of setting

up operations in India and were looking forward to doing business there in alarger context. Earlier, Mr. Sharma inaugurated the India Pavilion' at the

international gems and jewellery show along with Didier Burkhalter, Federal

Councillor, Head of the Federal Department ofHome Affairs, Switzerland.

The entire show is being organised by the Gem and Jewellery Export

Promotion Council, which is hosting India's top 53 brands at this global

platform. The show is also an attempt to showcase India's rich culture and cuisine at

the global level which is being ghosted at the elegantly displayed India

Palace created in BaselWorld 2011.


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India warned over importing

roughs from Zimbabwe SURAT: Indian diamantaires are in a big dilemma. Even thoughthe Kimberley Process Certification Scheme (KPCS) has cleared

rough diamonds from Zimbabwe, they will not be able to

import them because the US and EU have warned against such

transactions. KPCS is the process designed to certify the originof rough diamonds from sources which are free of conflict

funded by diamond production.

The process was established in 2003 to prevent diamond sales

from financing rebellious movements. The certification

scheme aims at preventing "blood diamonds" from enteringthe mainstream rough diamond market. It was set up to

assure consumers that by purchasing diamonds they were not

financing war and human rights abuses.


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Exports to Japan hit, but

temporarily Japan took $300 million, mainly of high end diamond jewelleryitems, of Indias overall gems and jewellery sales of $28.4

billion in 2009-10. Indian jewellers are yet to get momentum

there due to various trade restrictions. Although it is too early

to assess the impact, exports here are likely to be hit for ashort time, said Rajiv Jain, Chairman of the Gems & Jewellery

Export Promotion Council. However, these will recover by the

middle of next month, he predicted.


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