The gems and jewellery industry has an important role in the Indian economy. India has the distinction of being one of the first countries to introduce diamonds to the world. The two major segments of the gems and jewellery business in India are gold and diamond jewellery, as per an Exim Bank report.
India is the largest market for gold jewellery in the world. Gold dominates the Indian jewellery market and formulates almost 80 per cent of the market share, which is followed by fabricated studded jewellery including diamond and gemstone studded jewellery. India has emerged as the largest cutting and polishing industry for diamonds in the world.
The Indian gems and jewellery industry has increased by about 5 per cent at Rs 2,000 billion (US$ 36.17 billion) in 2011-12, as compared to Rs 1,950 billion (US$ 35.26 billion) in 2010-11. The sector accounts for 14 per cent of the total merchandise exports in India.
The jewellery industry in India is estimated at Rs 150,000 crore (US$ 27.12 billion), of which only 5 per cent is organised, thus creating opportunity for the foreign players to enter the Indian market.
The overall consumption of jewellery, including gold, is much higher at Rs. 2,78,000 crore and represents almost 6% of private consumption in India – with the difference between the consumption and the retail market size being accounted for by gold or custom-made jewellery not sold in retail outlets. A global comparison shows per capita consumption of jewellery in India stands at Rs. 1,480, compared to Rs. 12,500 in the US, Rs. 10,700 (the EU), Rs. 4,850 (Hong Kong), Rs. 4,530 (Japan) and Rs. 1,825 (China).
As per www.ibef.org, The Indian jewellery market is dominated by gold, which consists of almost 80 per cent of the market share, followed by fabricated studded jewellery including diamond and gemstone studded jewellery. The total exports of gems and jewellery during April 2011 to March 2012 stood at USD 42.84 billion, including that of cut and polished diamonds at USD 23.33 billion, gold at USD 16.52 billion and coloured gemstones at USD 342.80 million. According to FICCI – Technopak report “Unlocking the Potential of India’s Gems & Jewellery Sector”, the traditional role of gems and Jewellery in India includes saving and investment, ornamental purposes, astrological and religious significance and is an integral gift and purchase item for festive and wedding occasions. While the last few years, the Indian domestic market has shown very promising signs evident from the growth in penetration of branded and organized retail across categories such as Fast Moving Consumer Goods, Consumer Durables, Apparels and Home Improvement, there is similar potential for Gems and Jewellery sector.
Key Industry Trends
- Branding and organized retail share will grow in urban markets and the focus on rural markets will increase.
- Preference will increase towards the hallmarking and certification of jewellery.
- There is a shift in consumer preference to diamond jewellery. Consumers are gradually preferring diamonds because of the guaranteed buy-back schemes, transparent written pricing and, most importantly, third-party certification.
- With increased urbanization and changing consumer taste preferring quality goods, organized players have been successful in establishing their presence by offering new and contemporary designs, hall marking and aggressive marketing.
- The new generation of consumers with an inclination to buy cutting-edge gadgets is purchasing jewellery in modern and aesthetic designs as fashion accessories in addition to purchasing it as an investment.
Source: TBZ Annual report