After establishing India as a global hub for diamond-cutting, the Gems & Jewellery Export Promotion Council has now turned its focus towards strengthening and expanding the coloured gemstones market in the country. In an interview with B&E’s Pawan Chabra, Rajiv Jain, Chairman of the Gems & Jewellery Export Promotion Council, outlines the problems and prospects for the gemstones trade in India
B&E: The Indian market is already established as an international hub for diamond cutting. But it’s still quite a way off from reaching a similar scale in the coloured gemstones business. What are the reasons for this lag?
Rajiv Jain (RJ): Taking into account the global gems & jewellery sector, India is already a very popular market for global players both in terms of domestic consumption and exports. For instance, out of 12 diamonds in the world, 11 are being cut, polished and processed in India. As far as gemstones are concerned, we are one of the world leaders in manufacturing with countries like China, Thailand, Sri Lanka et al, but we are still not the world leader. There are ample opportunities available in this segment of the market and I don’t see any reasons why we can’t lead this segment as well. We have a pool of skilled labour in the country and over 3.5 million people are working in the gems & jewellery industry in India. What we actually need is to make consolidated efforts towards reaching greater scale in the gemstones trade.
B&E: The Gems & Jewellery Export Promotion Council recently organised a conference focusing solely on the coloured gemstones market in India. What was the idea of organising such an event and what kind of response did it generate?
RJ: The idea of the conference was to get all the stakeholders under one roof and set an agenda for making the gems & jewellery industry in India more globally competitive and consumer-focused. The domestic gems & jewellery industry is undoubtedly the fastest-growing industry in the world, be it in exports or in terms of domestic consumption. In India not only does it contribute extensively to the economy, but it also provides substantial employment opportunities in the country. In FY2010-11, India exported coloured gemstones worth $315.22 million, registering an increase of 9.92% as compared to $286.78 million exported during 2009-2010. However, considering that India’s total exports stood at $43 billion in 2010-11, the share of coloured gemstones exports is relatively small. Therefore, looking at the potential in this field, we in the Gem & Jewellery Export Promotion Council are determined to expand our exports of coloured gemstones significantly over the next three years. The aim of the conference was to address all the global concerns, forge a solid road ahead, determine all the necessary steps that need to be taken to establish and maintain a flourishing coloured gemstones trade globally. We are overwhelmed by the response it got in its first year itself and we will make it only bigger and better in times to come.
B&E: Apart from the fact that coloured gemstones compete with the other segments in the jewellery market, what are the major growth challenges you see going ahead?
RJ: The competition is not the other segments within jewellery; rather, we are competing with other products that come under the luxury framework. The biggest advantage with this industry is that the product has a residual value, which isn’t the case with other luxury goods. This is the USP, which has been underplayed and has not been talked about by the industry so far. However, there are challenges as we move towards making India a hub for coloured gemstones. The industry today is highly unorganised and this is the biggest challenge to the industry today. Then, there is a lack of raw material availability. This was one of major reasons that we invited global miners to the conference as the motive behind the show was to present India as a potential major market for gemstones. Rather than going to places like Dubai, Hong Kong, Thailand et al for auctions, the same can be done in India as well. The country already has a pool of cutters, which will make business straight and simple. We even need to improve in the areas of technology & skilled labour, but it is expected that as we move ahead, these challenges will find optimal solutions.
B&E: In the light of spiralling price in gold and silver, will the strong domestic demand for gems and jewellery continue to hold?
RJ: The domestic demand for jewellery in India is huge and it is expected to grow as the disposable income of people is on the rise. Going ahead, you will see many more brands becoming a part of the India growth story. Be it by the way of company-owned showrooms or via franchisee agreements, you will see many more names being added to the Indian industry in the coming times.
B&E: The industry has been demanding a change in the taxation policy for a long time now. Do you see it happening anytime soon? What other changes in the policy have you been asking for?
Rajiv Jain (RJ): Taking into account the global gems & jewellery sector, India is already a very popular market for global players both in terms of domestic consumption and exports. For instance, out of 12 diamonds in the world, 11 are being cut, polished and processed in India. As far as gemstones are concerned, we are one of the world leaders in manufacturing with countries like China, Thailand, Sri Lanka et al, but we are still not the world leader. There are ample opportunities available in this segment of the market and I don’t see any reasons why we can’t lead this segment as well. We have a pool of skilled labour in the country and over 3.5 million people are working in the gems & jewellery industry in India. What we actually need is to make consolidated efforts towards reaching greater scale in the gemstones trade.
B&E: The Gems & Jewellery Export Promotion Council recently organised a conference focusing solely on the coloured gemstones market in India. What was the idea of organising such an event and what kind of response did it generate?
RJ: The idea of the conference was to get all the stakeholders under one roof and set an agenda for making the gems & jewellery industry in India more globally competitive and consumer-focused. The domestic gems & jewellery industry is undoubtedly the fastest-growing industry in the world, be it in exports or in terms of domestic consumption. In India not only does it contribute extensively to the economy, but it also provides substantial employment opportunities in the country. In FY2010-11, India exported coloured gemstones worth $315.22 million, registering an increase of 9.92% as compared to $286.78 million exported during 2009-2010. However, considering that India’s total exports stood at $43 billion in 2010-11, the share of coloured gemstones exports is relatively small. Therefore, looking at the potential in this field, we in the Gem & Jewellery Export Promotion Council are determined to expand our exports of coloured gemstones significantly over the next three years. The aim of the conference was to address all the global concerns, forge a solid road ahead, determine all the necessary steps that need to be taken to establish and maintain a flourishing coloured gemstones trade globally. We are overwhelmed by the response it got in its first year itself and we will make it only bigger and better in times to come.
B&E: Apart from the fact that coloured gemstones compete with the other segments in the jewellery market, what are the major growth challenges you see going ahead?
RJ: The competition is not the other segments within jewellery; rather, we are competing with other products that come under the luxury framework. The biggest advantage with this industry is that the product has a residual value, which isn’t the case with other luxury goods. This is the USP, which has been underplayed and has not been talked about by the industry so far. However, there are challenges as we move towards making India a hub for coloured gemstones. The industry today is highly unorganised and this is the biggest challenge to the industry today. Then, there is a lack of raw material availability. This was one of major reasons that we invited global miners to the conference as the motive behind the show was to present India as a potential major market for gemstones. Rather than going to places like Dubai, Hong Kong, Thailand et al for auctions, the same can be done in India as well. The country already has a pool of cutters, which will make business straight and simple. We even need to improve in the areas of technology & skilled labour, but it is expected that as we move ahead, these challenges will find optimal solutions.
B&E: In the light of spiralling price in gold and silver, will the strong domestic demand for gems and jewellery continue to hold?
RJ: The domestic demand for jewellery in India is huge and it is expected to grow as the disposable income of people is on the rise. Going ahead, you will see many more brands becoming a part of the India growth story. Be it by the way of company-owned showrooms or via franchisee agreements, you will see many more names being added to the Indian industry in the coming times.
B&E: The industry has been demanding a change in the taxation policy for a long time now. Do you see it happening anytime soon? What other changes in the policy have you been asking for?
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