Gems and Jewellery Industry in India

The Gems and jewellery sector has a huge market in India and abroad alike. This market encompasses various kinds of jewels including gold, coloured gemstones, costume jewelleries, platinum and diamonds. The sector is expected to register a compound annual growth rate (CAGR) of 13 per cent during 2011-2013, according to a report Indian Gems and Jewellery Market Forecast to 2013, by research firm RNCOS

The growth rate of the gems and jewellery industry in India stands at 15 per cent, while the domestic jewellery market was worth US$ 16-18 billion. As far as exports are concerned, this sector constitutes more than 12 per cent of the total exported products. The journal estimated that by year 2015 the gems and jewellery sector will help India earn about US$ 25-35 billion in form of export revenue. A steady sale of jewelries, especially of gold, has helped the gems and jewellery industry in India flourish at this rapid rate. Moreover, people are also investing their money in gold as a future recourse to counter tough times. In addition, India has evolved as a great place for diamond processing, according to the industry body

Gold is the principal raw material for making jewellery in India. In 2007 gold had a market share of US$ 12.24 billion (Rs 550 crores), while diamond had a market share of US$ 2.56 billion (Rs 115 crores). Eighty per cent of the gems and jewellery industry in India is dominated by gold and the rest is controlled by diamond and gemstone industry. This trade in India is mainly fragmented as 96 percent of total business comes from unorganised sector

Gems and Jewellery Industry in India: Diamond

Currently India is the major polishing and cutting hub for diamonds. India is also the third largest consumer of polished diamonds. The surge of urbanization and rapidly growing middle class in India has led Indian consumerism to new heights, particularly in the diamond jewellery sector. Every 11 out of 12 diamonds sold around the world are processed in India regardless of the place they are mined.

Indian diamond industry is mainly involved with cutting .polishing and exporting diamond, diamond cut and polished in india are universally priced, the craftsman are equally skilled in cutting all shapes and size of diamond, Mumbai . Surat . Bhavnagar, Ahmedabad and many small towns of Gujrat.

Size

Large market for Gems & Jewelery with domestic sales of over $10 billion. 4% of the global Gems and Jewelery market . Exports of over $15.5 billion; over 18% of Indias exports. India is the largest consumer of gold jewelery in the world. Accounts for about 20% of world consumption. India is the largest diamond cutting and polishing centerer in the world. 60% value share, 85% volume share and 92% share of the world market by number of pieces. Third largest consumer of polished diamonds after USA and Japan.

Structure The Indian Gems & Jewelery industry is highly fragmented with a large number of domestic private sector companies.

A large portion of the market is in the unorganized sector .

India is gaining prominence as an international sourcing destination for high quality designer jewelery . Walmart, JC Penney etc. procure jewelery from India .

Policy

100% FD is permitted in the Gems & Jewelery sector through the automatic route. SEZs and Gems and Jewelery Parks have been set up to promote investments in the sector.

Opportunity India is one of the largest exporters of gems and jewelery India is the diamond polishing capital of the world

Outlook India is the fastest-growing jewelery market in the world.

Branded jewelery likely to be the fastest-growing segment in domestic sales. Expected to grow at 40% p.a. to $2.2 billion by 2010. Exports expected to grow from $15.5 billion in 2005 to over $25 billion by 2010.

Potential India has several well recognized strengths which have made it a significant force in the global Gems and Jewelery business.

Highly skilled, yet low-cost labor. Established manufacturing excellence in jewelery and diamond polishing. India is the most technologically advanced diamond cutting center in the world. Opportunity to address one of the worlds largest and fastestgrowing Gems and Jewelery markets. Opportunity to leverage Indias strengths to address the global market

Role of GJEPC
Set-up in 1966, the GJEPC has over the years effectively moulded the scattered efforts of individual exporters to make the gem and jewellery sector a powerful engine driving India's export-led growth. This apex body of the gem & jewellery industry has played a significant role in the evolution of the Indian gem and jewellery industry to its present stature. GJEPC is continuously working towards creating a pool of artisans and designers trained to international standards so as to consolidate the Indian jewellery industry and establish it as a prominent global player in the jewellery segment.

Reuters) - Bharat Diamond Bourse will open on a bigger site on Oct. 17, becoming the world's largest trading hub, according to trade body the Export Promotion Council, competing with Antwerp in Belgium.
The bourse aims to bring exporters, banks, customs officials and other investors under one roof, with the 918 members of the old bourse already registered to trade. The exchange has another 1,357 provisional members. Here are some details on the diamond industry in India: - India, the third largest diamond consumer after the United States and Japan, accounted for 8 percent of global consumption in 2009. This is expected to grow to 11 percent by 2016. - De Beers, the world's largest diamond producer with 40 percent of the market, expects India and China to be the next engines of growth for the sector, together accounting for 20 percent of consumption in 2016. The United States will retain the top spot with 37 percent. - De Beers supplies rough diamonds to selected customers who polish and cut the roughs for jewellery making. De Beers has a network of 75 "sight holders" or customers, globally, 29 of them in India. - Other than local consumption, India also imports diamonds for re-export. The country processes about seven in every 10 of the world's diamonds, and holds about 57 percent of the diamond processing industry. - The processing industry accounts for 70-75 percent of total diamond exports and employs 850,000 people, making it the largest cutting centre by value and number of employees. - In 2009/10, India exported 59.9 million carats of diamonds valued at $18.24 billion

SWOT ANALYSIS Strengths:

- One million craftsman associated with it. their skills can be harnessed for designing and making modern jewellery. - Abundance of cheap and skilled labor in India. - Excellent marketing network spread across the world. - Supportive government industrial/ exim policy.

Weaknesses:
- High domestic interest rates compared to elsewhere - Small firms lacking technological/ export information expertise. - Low productivity compared to labor in china, Thailand and Shrilanka. - As the major raw material requirements need to be imported, companies normally stock huge quantities of inventory resulting high inventory carrying costs.

Opportunities:
- New markets in Europe & Latin America - Growing demand in south Asian & far east countries. - Removal gold control act.

Threats:
- China, Sri Lanka and Thailand's entry in small diamond segment - Infrastructural bottlenecks, frequent changes in exim policies, irregular supply of gold. - Over dependence on single-channel supply chain. Decisions of De Beers and Argyle's terms for renewing their supply contract

Diamond Processing Industry in Gujarat : Surat & other clusters:

Out of every batch of 10 diamonds made in the world, 7.5 are made in India. It shows that India has established itself as the world's largest diamond processing center. In India, the diamond processing units are mainly located in Gujarat, particularly in Surat, Navsari and some parts of Saurashtra & north Gujarat region. About 80% of country's diamond processing work is being done in Gujarat, out of which more than 50% is conducted at Surat only. The diamond processing industry in India ,thus, is quite unique as it is developed at one location in an industrial cluster. Surat city is known as diamond city of India. The Industy comprises of about 2000 units of cutting & polishing out of which about one third are located in Surat. IT employs about 15 lakh people directly and provides employment opportunities to more than 25 lakh people. Their wage bill comes to Rs. 1500 crore per annum. An investment of Rs. 5 crore in this sector creates an employment for 1000 people. The industry is, thus, a major employer. The processing capacity of each unit ranges from 4 to 400 carats, While production capacity depends on the type, shape and size of the diamond, it also depends on the skill of the workers. There are about 7000 different types of diamonds. The processing is done through ingeniously manufactured and manually operated machines The industry developed in 60s in Surat because of its proximity to Mumbai, where most of the export houses are located. Later, industry has developed its footing in some of the centers of Saurashtra like Amreli, Bhavnagar, Mahuva, Palitana and some of the centers of Naorth Gujarat like Visnagar, Mehsana, Sidhpur, Palanpur, etc.

2.5 Key Characteristics of Diamond Processing Industry in Gujarat:

1. Most of units are in the cottage & small sector. 2. Labor intensive & not capital intensive - so more entrepreneurs, more employment 3. It is not power-intensive nor polluting, 4. Traditional business approach 5. High level of product innovation 6. Family owned businesses 7. Based on imported raw materials 8. Uses inherited skills of domestic workers 9. Wholly export6 oriented 10. high working capital as high inventories 11. The technology & skill required for cutting and polishing of diamonds have been largely developed within the country and at industry's own costs 12. Most of the diamond dealers are inter-connected with each other and have developed a collective interest in achieving higher & higher export targets. 13. 95% of active diamond exporters are based in Mumbai and Surat thus making it possible for the trade to serve the varied requirements of the numerous foreign buyers from different countries 14. Vast manufacturing base and marketing network 15. Large volumes, wide varieties & economical costs 16. Gradual switch over from contract processing to in-house processing, modern quality control and healthy working conditions. 17. The professional expertise and venture some spirit of youngsters resulting into diversification of export markets 18. Varied product mix, consistent assortments, prompt deliveries and sales on credit, reputation for quality 19. Infrastructure facilities in terms of : 20. Cutting down on export duties on capital equipments, fully free import of gold and other metals, movement of imported goods free from sales tax & octroi, exemption of export profits from income tax and cutting down red tape procedural delays.

Top Diamond Brands in India

Branded Jewelry has transformed the Indian jewelry market significantly and hopes to do well in future too. Some of the top diamond brands in India include:

Adora is as diamond jewelry brand, which was launched by a Mumbai based Jewelry Corporation. The brand is themed on love and celebration of life and is trusted by many celebrities. The list includes the Nightingale of India, Lata Mangeshkar. An exclusive collection Swaranjali was designed for the admirers of the legendary singer as well for all music lovers. Adora boasts of about 65 outlets in 35 cities. Tanishq is one of the most popular diamond jewelry brands in India and is known for its innovative designs. It is the jewelry business group of Titan Industries Ltd, which is promoted by the TATA group. It was launched in 1995 and boasts of 84 outlets in 61 cities. Tanishq introduced the collections strategy in jewelry. Kiah is another brand which is deemed stylish, light weight and yet striking. It was launched by Sheetal manufacturing company in October 2004. Celebrating womanhood, the brand name, Kiah stands for beautiful place. It even won the Best showroom in DTC Diamond Season 2005-2006. Nirvana Diamonds were launched by Fine Jewelry (I) Ltd in 1987. Implementing the state of the art technology, the collection is targeted at fashion conscious, modern and independent women. To prove its authenticity, Nirvana even offered lifetime warranty to its customers. D'damas is one of the oldest diamond houses of India. It forms a part of the Gitanjali Digico Group and was founded in 1966. The brand offers world class cutting and polishing facilities at five locations in the country.

Targeting the US$52-billion international retail market for diamonds, India has become the world's largest manufacturer of cut and polished diamonds. India now processes 85% of the world's polished diamonds, far ahead of rivals Israel and the United States. India's diamond and jewellery industry employs more than 4 million workers, the largest pool of such skilled labour on the planet. Diamond and jewellery exports from India surpassed US$14 billion in 2006, second only to its $26 billion in systems and technology

Indias polished diamond exports rose 24 percent year on year to $2.22 billion in May 2011, according to the Gem & Jewellery Export Promotional Council (GJEPC). By volume, polished exports grew 18 percent to 5.042 million carats as the average price of the diamonds increased 5 percent to $440.68 per carat.

Polished imports to India jumped 54 percent to $1.55 billion during the month, while net polished exports, representing the excess of exports over imports, fell 16 percent to $668 million. Rough imports grew 44 percent to $1.41 billion during the month with volume declining by 32 percent to 10.629 million carats. The average price on the rough imports more than doubled to $132.97 per carat. Rough exports rose 99 percent to $155.3 million and net rough imports, the excess of imports over exports, rose 39 percent to $1.26 billion. Indias May net diamond account, representing the total exports of polished and rough diamonds less total imports, fell to a deficit of $590.1 million, compared with a deficit of $113.1 million a year earlier

MAJOR EXPORTING COUNTRIES

The diamond producing top countries list is given below. The Botswana in Africa is the main maker of diamond in the world by value. The second and third top producers are Russia and Canada correspondingly. It is motivating to reminder that Canada is the third biggest producer of diamonds. After more countries were producing the diamonds.

Russia Russia starts producing diamonds in the late 1950's and became one of the top three producers in 1970. The Russian mines are at high leeway and in challenging environments yet they keep on to produce at high levels, opposing with Botswana for the leading producer place.

Botswana

Botswana had immaterial manufacture until 1970 and became one of the top producers in the mid-1980s. Botswana has some of the maximum yielding mines in the world and has been the world's most important producer of diamonds since it displaces Australia as the most important producer in 1999.

Congo

The body in charge of certifying minerals for export from the Democratic Republic of Congo proclaimed that it was scenery up three branches in previously rebel-held areas to combat the deal in so-called blood diamonds. The Centre for Evaluation, Expert Analysis and Certification of Precious Minerals CEEC) plans to create offices in Goma, Bukavu and Kisangani in the eastern part of the country.

Australia

Australia come into commercial manufacture in 1981 and fast became the top producer of gemquality diamonds. In current years, production in Australia has fallen piercingly as deposits there were exhausted. It will be in Canada where many companies have owed large budgets for looking at and new transportation routes permit for delivery of equipment and supplies.

South Africa

South Africa was where the African diamond hurry began in the 1870's. It right away became the leading manufacturer of gem-quality diamonds and held that place until the 1920's when Zaire entered main production. South Africa has been a reliable producer for the past few decades with construction volumes frequently ranging between 4 million and 6 million carats per year.

Canada

For many years, the consideration of finding diamonds in Canada was little more than a prospectors vision. Except that dream became a realism following the discovery, in the 1990s, of more than a few world-class diamond-bearing put down in Canadas North. Diamond searching began in Canada as early as the 1960s, but most important kimberlite discoveries were not made in anticipation of the 1980s.

Angola

Diamonds were first exposed in Angola in 1912. For the next 40 years, the manufacturing was solely based on alluvial diamond mining (mining that take out diamonds from deposits of sand, gravel and clay, which have been as expected transported by water wearing away and deposited

along either the banks of a river, the shoreline or on the bed of the ocean) and was functioned as a monopoly by the Diamontes de Angola, Diamang, a joint Portuguese - Belgian producer. Namibia

Namibia

Diamonds were exposed in the Namib Desert in April 1908 near Lderitz, when Zacharias Lewala, a previous worker from the Kimberley diamond fields, establishes a diamond by the railway. Diamond Fields worldwide and De Beers both mine for diamonds in Namibia. The Namdeb Diamond Corporation (Pty) Limited, Namibias main diamond company, is split uniformly between the Government of the Republic of Namibia and De Beers Centenary AG, a corporation of De Beers.

Ghana

The government also is annoying to get bigger Ghana's diamond mining industry, which has produced primarily business grade gems from alluvial gravels since the 1920s. More than 11 million carats of proven and credible reserves are located concerning seventy miles northwest of Accra. In the early 1990s, the government proclaimed plans to privatize its diamond-mining operations and to get bigger manufacture.

Brazil

Brazil has a profusion of natural minerals, and with 83 varieties of minerals it is one of the world's richest countries in that reverence. Brazil is also one of the main gemstone manufacturer in the worlds, producing diamonds, emeralds, aquamarines, amethysts, citrines, agates and tourmalines, to name a few. It is also the only producer of royally topaz and paraiba tourmaline gems.

India

The Diamonds was first mined in India. As far as we discern, all the diamonds of very old times came from that country. It is probable; though, that some came from Africa. All discoveries of diamonds all through the world in alluvial deposits, of which we have cognizance, were made by men while washing the sands and gravels for gold.

Central African Republic

Diamonds were exposed in Central African Republic in the 1960s in the north eastern county of Boungou River. Major searching was undertaken throughout the 1990s. Though, in 2003 the Central African Republic Government balanced all mining permits to allow it to confirm that the permit holders were up to date with their

taxes and that allow were still in order.

Guinea

Guinea has probable diamond reserves of just about 20 Mct. Diamonds are Guineas second main export, after bauxite. By means of thed ban of unlicensed ventures, overseas mining companies have begun to invest in the diamond segment. The Aredor Diamond Mine, situated in southeastern Guinea, near Macenta, has produced some of the worlds most expensive diamonds, totalling more than 1.3 million carats at a worth of US$377 million

The Diamond, Precious Stones and Jewelry Administration reports that polished diamond exports rose nearly 50% in 2010, and that rough diamond exports rose 62%. Supervisor of Diamonds Shmuel Mordechai reported that polished diamond exports rose 48.1% to $5.9 billion in 2010 from $3.9 billion in 2009, and that rough diamond exports rose to $3 billion from $1.9 billion. "2010 was a year of recovery in everything, in both the import and export of rough and polished diamonds. The growth in 2010 is substantial compared with 2008, but is still 6.5% compared with the 2007 figures. Past achievements have not yet been repeated, but we're definitely heading in the right direction