GEMS & JEWELLERY

SUBMITTED BY
SIMRAN BEDI
NISHA RAMAN
Sem – 4,Sec-B
MBA-IB (2009-11)
 FLOW OF PRESENTATION
• Overview
• Production Centers
• Domestic Industry
• Trend in Export
• Major Export Destinations
• Export from India for last three years
• Major Exporters in India
• Major Competitors in the global market
• Provisions in India’s Foreign Trade Policy
• Quality Standards
• Any other relevant Information
2
 GEMS AND JEWELLERY
Gems and Jewellery is an important emerging sector in the Economy.
Ranked among the fastest growing sectors, it is also a leading sector
for foreign exchange generation.

Major Segments
The sector comprises of two major segments
 Gold
• Comprises around 80% of the Indian jewellery market, balance
comprising fabricated studded jewellery (Diamonds and Gemstones).
• High levels of manufacturing and domestic consumption.
 Diamonds
• World's largest cutting and polishing Industry for diamonds.
• Well supported by the banking sector and government policies.
• Export potential for polished diamonds / finished diamond jewellery.

Sources:-ibef
3
 GEMS & JEWELLERY
INDUSTRY
One of the fastest growing segments in the Indian economy
•
with an annual growth rate of approximately 15 percent.
• The current market size of the Indian Gem & Jewellery
Industry is US$ 25 Billion.
• Total export of gems & jewellery in the year April-
March,2010 was 29081.11 with a 2.36% growth rate &
16.27% share in the total export.
• The domestic market was guessed to be approximately
USD16.1 billion in financial year 2009.
• Consumes nearly 800 tonnes of gold that accounts for 20
percent of world gold consumption, of which nearly 600
tonnes go into making jewellery

SOURCE- GJEPC
 CONTD…
• India's strength lies in the 2 million highly skilled
workforces in the country in the gem & jewellery
sector, out of which 1 million are exclusively
engaged in export production.

• The Gem & Jewellery Industry has started

showing positive signs of revival and growth.

SOURCE- GJEPC
 DIAMONDS INDUSTRY
• Largest diamond cutting and polishing centre in the world—with
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.
• In the period of 9 months from April to December’09 exports of
rough diamond declined by 37% to 157.09 lakh carats whereas
the exports of cut & polished diamonds mounted by 18% to
407.36 lakh carats
• Nearly 9 out of 10 diamonds sold worldwide are cut and
polished in India.

• Exported cut and polished diamonds worth US$ 14.18 billion in

2007-08.

SOURCE- GJEPC
 Contd…
• Manufactures diamonds of all cuts,
shapes and sizes of all varieties like
round, princess, baguettes and all fancy
cuts.

• Has democratized Diamonds by

mastering the art of cutting near gem
quality diamond.
 OVERVIEW
• Large market for Gems & Jewellery with domestic sales
of over $10 billion
• 4% of the global Gems and Jewellery market
• Exports of over $15.5 billion; over 18% of world’s exports
• India is the largest consumer of gold jewellery in the
world
• Accounts for about 20% of world consumption
• India is the largest diamond cutting and polishing centre
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   

SOURCE- GJEPC
8
Cont.-
The GJ sector may be further categorized into the following
sub-sectors based on characteristics, processing
techniques, preciousness in terms of price range and
marketability.
1. Gemstones
❑ Diamonds
❑ Colored Stones-precious, semi-precious, synthetic

2. Jewellery
❑ Plain gold Jewellery
❑ Studded Jewellery
❑ Silver Jewellery
❑ Costume Jewellery

3. Pearls

9
 MAJOR
PRODUCTION CENTRES IN
INDIA

10
 Source: official website of Gujarat ,as on 17/12/08.
www.vibrantgujarat.com/detailed-sector-profiles/gems-jewellery.pdf
& KPMG ANALYSIS
Trends in exports

12
 EXPORTS
• Total export of gems & jewellery in the year April-
March,2010 was 29081.11 with a 2.36% growth rate &
16.27% share in the total export.

• Exports posted a modest growth of 1.45 per cent during

2008-09 at US$ 21.1 billion, primarily driven by gold
jewellery exports, including medallions and ornaments.

• The country exported US$ 20.8 billion of gem and jewellery

in 2007-08.

• The United Arab Emirates (UAE) was the largest importer of

gems and jewellery from India in 2008-09, with a share of 31
per cent followed by Hong-Kong(25%) and U.S.A(20%).

SOURCE- GJEPC
 CONTD…

• The sector accounted for 13 per cent of

India’s total merchandise exports.

• The export industry mainly comprises

of small-to-large units based in various
special economic zones (SEZs)
supplying primarily diamond-studded
jewellery
 EXPORTS DATA
ITEMS 2005 2006 2007 2008 2009(APR-
OCT)
CUT & POLISHED 53892.02 48905.5 57117.1 58649.4 45365.09
DIAMOND 7 7 5

GOLD JEWELLERY 16498.21 22567.4 11637.1 9406.49 5572.37

4 2
COLOURED 975.07 1062.27 1111.05 1197.55 834.80
GEMSTONES

ROUGH DIAMONDS1865.49 2388.26 2280.32 3474.93 1992.95

VALUE IN CRORES

SOURCE- GPEC
SOURCE-
MAJOR EXPORTERS IN INDIA
 Major Exporters in India
• RAGHUNANDAN PRASAD & SONS
• S. ZAVERI & SONS JEWELLERS
• JAGDISH & SONS
• RIBY GEMS AND FASHION JEWELRY
• BN GHOSH & CO.
• MARUTI JEWELLERS
• MILLENIUM STAR
• SILVER STONE
• SHRI RADHEY CHAIN
• DD JEWELLERS

18
Major Export Destinations
14.45

25.27
0.47

9.98

0.63
0.04

20.52
25.91

0.18
1.1
USA UAE CHINA
SINGAPORE U.K 1.45 HONG KONG
NETHERLAND GERMANY BELGIUM
ITALY
Source: The 2003-2008 OTHER Philip M. Parker, Insead
World Outlook for jewlery-Prof.
 MAJOR PLAYER OF THE WORLD

Italy Hong Kong

U.S.A Thailand
UAE
India

Source: GFMS
 IMPORT DATA
ITEMS 2005 2006 2007 2008 2009(APR-
OCT)
ROUGH DIAMONDS 40039.14 38401.0 40170.6 40877.2 21898.13
9 5 4

GOLD BAR 7034.52 7905.74 9734.41 10820.3 13062.77

2
CUT & POLISHED 16010.27 8832.61 17396.6 31209.4 27056.46
DIAMONDS 1 5

RS. IN CRORES

SOURCE-
GPEC
 IMPORT TREND

I
N

C
R
O
R
E
S
 Major Importers
• LEVIN HEALTH CARE
• SUNSHINE CONSULTANCY SERVICES
• KRISHNAM
• HI INTERNATIONAL
• SHREEJI GEMS & SILVERS
• FAMMORE ENTERPRISES.PVT.LTD
• SHIBINS
• SARIT AXPORTS CONSORTIUM
• SANJAY EXPORTS
• MONTOSTONE

23
 Net export from India for last two years

SOURCE- GJEPC
 Net imports from India for last two years

SOURCE- GJEPC
Major Competitors in the
global market
 Source: The 2003-2008 World Outlook for jewllery-Prof. Philip M. Parker, Insead
 FTP
PROVISIONS
 Provisions in India’s Foreign Trade Policy

• Schemes for Gold / Silver / Platinum Jewellery-

Exporters of gold / silver / platinum jewellery and
articles thereof may import their essential inputs
such as gold, silver, platinum, mountings, findings,
rough gems, precious and semi-precious stones,
synthetic stones and unprocessed pearls etc. in
accordance with the procedure specified in this
behalf.
• Replenishment Authorization Exporters may obtain
Replenishment (REP) Authorizations from RA in
accordance with procedure specified in HBP v1.

30
 GOVERNMENT INITIATIVES
• 100 percent foreign direct investment (FDI)
in gems and jewellery through the
automatic route is allowed.

• The government has lowered import duty on

platinum and has exempted rough colored
precious gems stones from customs duty.

• Rough, semi-precious stones are also

exempt from import duty.
 CONTD…

• Setting up of SEZs and gems and jewellery parks

to promote investment in the sector.

• The government abolished import duty on

polished diamonds.

• The export of colored gemstones on a

consignment basis has been allowed.
 CONTD…
• Duty-free import of consumables for metals other
than gold and platinum up to 2 percent of freight
on board (f.o.b) value of exports.

• The government has raised the limit value of

jewellery parcels for export through foreign post
office (including via speed post) from US$ 50,000
to US$ 75,000 and the time period for re-import of
branded jewellery remaining unsold has been
extended from 180 days to 365 days.
 CONTD…
• To neutralize duty incidence on gold
jewellery exports, it has now been decided
to allow Duty Drawback on such exports.

• To promote export of Gems & Jewellery

products, the value limit of personal
carriage have been increased from US$ 2
million to US$ 5 million in case of
participation in overseas exhibitions.
 SPECIAL FOCUS INITIATIVE
• Import of gold of 1
• 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 of commercial

samples shall be Rs. 300,000.

• Duty free re-import entitlement for rejected

jewellery shall be 2% of FOB value of exports.
 CONTD…
• Duty Free Import Entitlement (based on
FOB value of exports during previous
financial year) of Consumables and Tools,
for:
1. Jewellery made out of:
(a) Precious metals (other than Gold &
Platinum)– 2%
(b) Gold and Platinum – 1%
(c ) Rhodium finished Silver – 3%
2. Cut and Polished Diamonds – 1%
 CONTD…
• 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 endeavor to make India a

diamond international trading hub, it is
planned to establish “Diamond Bourse
(s)”.
 QUALITY STANDARDS
• Maintains strict quality control and
adheres to world quality standards such
as:-
– ISO 9000-2000
– Business Excellence Model
– Best Practice Principles

• GJF has created a brand "TRUST MARK”

based on high standards.
Quality Standards

Trust mark
is an assurance to
a customer
of the commitment
of the
jewellery for his
quality &
best business
practices

39
 HALLMARK CERTIFICATION
• Hallmarking is the accurate determination and official recording of the
proportionate content of precious metal in gold. Hallmarks are thus official
marks used in many countries as a guarantee of purity or fineness of gold
jewellery.
• BIS was named as the sole agency in the country for Hallmarking of gold
jewellery under the provisions of the BIS hallmark Act, 1986.
• BIS, as the National Standards Body of India is primarily engaged in the
preparation and promotion of standards and operation of different quality
certification schemes. In this context, the BIS Precious Metals Sectional
Committee (MTD 10) has formulated and published the following Indian
Standards on Gold and Gold Alloys:
• a) IS 1417 Grades of gold and gold alloys, Jewellery/Artefacts-Fineness and
Marking
b) IS 1418 Assaying of Gold in Gold Bullion, Gold alloys and Gold
Jewellery/ Artefacts - Cupellation (Fire Assay Method)
c) IS 2790 Guidelines for manufacture of 23,22,21,18,14 and 9 carat gold
alloys
d) IS 3095 Gold Solders for use in manufacture of Jewellery
40
 ISSUES & CHALLENGES
• Since October 2008, exports of gems and jewellery
products have been witnessing a sharp decline. The
decline was reported to be 16 per cent, 34 per cent
and 26 per cent in October, November and
December 2008.

• Fresh orders declined by 20 percent in November

and December .

• The unprecedented crisis and sluggish overseas

demand has forced the industry to cut production
by almost 25 per cent, resulting in job losses,
according to the GJEPC.
 CONTD…
• Fall in consumer demand and build up
in inventory liquidity problems have
led to loss of around two lakh jobs
during the last six months.

• The closing down of units, mostly in

Gujarat, has led to a situation where
an estimated two lakh diamond
workers have lost their jobs in Surat,
the hub of gems and jewellery trade.
 REFERENCES-
• TOPIC: PRICE HISTORY
Source: http://www.goldprice.org/gold-price-history.html(WORLD
GOLD COUNCIL)

• TOPIC: CORRELATION OF RETURN WITH GOLD

Source: ecowin /calculations –world gold council
http://www.gold.org/deliver.php?file=/value/stats/statistics/xls/India_output.x

• TOPIC: COMPARISON OF EQUITIES AND GOLD

Source: world gold council http://
www.research.gold.org/prices/equities/comparison.pdf

• TOPIC: DEMAND OF GOLD

SOURCE: WORLD GOLD COUNCIL
http://www.gold.org/deliver.php?file=/pub_archive/pdf/GDT_2008.pdf

• TOPIC: INDIA OUTPUT

SOURCE: WORLD GOLD COUNCIL
http://www.gold.org/deliver.php?file=/value/stats/statistics/
xls/India_output.xls
• TOPIC: DEMAND AND OUTPUT COMPARISON
SOURCE: WORLD GOLD COUNCIL
http://www.gold.org/deliver.php?file=/value/stats/statistics/xls/India_output.xls

• TOPIC: GOLD VOLUME AND VALUE COMPARISON

Source: world gold council

http://www.gold.org/deliver.php?file=/assets/file/pub_archive/pdf/GDT_Q4_2007.pdf

• Gold in Percentage
Source: world gold council
http://www.gold.org/deliver.php?file=/value/stats/statistics/xls/Quarterly_Gold_and_FX_Rese

• Exporters & Importers

Source :gjepc
• Importers
Source :gjepc
• PRODUCTION CENTRES
Source: official website of Gujarat , as on 17/12/08.
www.vibrantgujarat.com/detailed-sector-profiles/gems-jewellery.pdf

• Policies
Source-Directorate general of foreign trade
http://dgftcom.nic.in/exim/2000/policy/contents.htm