Indian Jewelry

An important emerging sector of Indian economy, gem and jewelry is a leading foreign
exchange earner for the country. The country consumes around 800 tonnes of gold that
account for 20 % of global gold consumption and nearly 600 tonnes of this goes into
jewelry making. The Indian jewelery market, which is estimated to be US$ 13.5 billion in
fiscal 2006-07, accounts for 8.3 % of the global jewelery sales, according to a study by
KPMG.

The increase in purchasing parity of the middle class and surging income levels have
resulted in consumption growth of gems and jewelery by about 11 % in the 5 year period
preceding 2006-07. It also contributes over 15 % of the total exports of country and
provides employment to 1.3 million people directly and indirectly. The two major
segments of the gem and jewelry industry in India are gold jewelery and diamonds. The
contribution of gold jewelry is about 80 % of the total jewelry market, with the balance
comprising fabricated studded jewelry, which includes diamonds as well as gemstone
studded jewelry.

Indian jewelry sector is well supported by Government

policies and the banking sector, with around 50 banks
providing about US$ 3 billion credit to the Indian
diamond industry. In addition, the country is expected to
have a diamond bourse soon.

History
Jewelery has been an integral part of the Indian culture
and civilization since ancient history. They were in
demand and fashion since ancient civilizations as
Harappa and Mohanjodaro. Made out of variety of
materials, jewelry can be adorned to highlight almost any part of body. Be it the
traditional jewelry or the latest ones that are continuously increasing in demand, i.e. The
costume and imitation jewelry. There is no dearth when it comes to accentuating the
beauty with wide-ranging imaginative & stunningly designed jewelry pieces.

Currently, India is the world’s largest diamond processing (cutting and polishing) country
with around 1 million processors treating over 57 % of the world’s rough diamonds by
worth. According to recent reports, 11 out of 12 diamond (stones) set in jewelry are cut
and polished in India. Processing is done on rough diamonds in a complete range of sizes
and qualities, including stones larger than 10 carats. In terms of carat, India's contribution
in this sector is about 80 % of the global market. Employing over 90 % of the global
diamond industry workforce, the country also accounts for about 90 % of the volume of
diamonds processed in the world.

Industry Overview
The `India Shining' factor, is, possibly, best reflected in the surge in India's gold and
jewelery exports, which have been making considerable contributions to the country's
foreign exchange earnings. And driving this growth in gold and jewelery (GJ) exports is
the Special Economic Zone in Mumbai that accounts for about 50 % of the country's gem
and jewelry exports.

With negligible domestic production of gold and diamonds, the Indian jewelry industry
has to depend entirely on on imported raw materials. The bulk of the domestic gem and
jewelry industry is concentrated in the unorganized sector that employs an estimate of 2
million workers serving over 0.1 million gold jewelers and 8,000 diamond jewelers.

The hub of India's jewelry industry is Mumbai that receives majority of the country's gold
and rough diamond imports. However, most of the diamond processing is undertaken in
the neighboring state of Gujarat, primarily in Surat, Bhavnagar, Ahmadabad and Bhuj.
But Mumbai does have a considerable number of modern semi-automatic factories and
laser-cutting units, majority of which are located in the special economic zone.

Exports
Exports from the industry yield US$ 17.1 billion in 2006-07 against US$ 16.64 billion in
2005-06, reflecting a growth of 26 %. While the diamonds accounted for 64 % of the
total exports, gold jewelery accounted for 30.47 %, colored gem stones and others
accounted for 1.44 % and 1.04 % respectively last year. The export of cut and polished
diamond segment US$ 10.90 billion, while the export of gold jewelery yielded US$ 5.21
billion last year. Colored gemstone exports fetched US$ 246.48 million last fiscal, against
US$ 232.35 million in the previous year.

Future growth in the gem and jewelery business is likely to be driven by increased
exports to the US and other markets, apart from a surge in domestic consumption.

Currently the major destinations for India's gem and jewelry exports are -

• United States (28 percent)

• Hong Kong (21 per cent)
• UAE (15 per cent)
• Singapore (9 per cent)
• Belgium (8 Per cent)

India's Exports of Gem & Jewelry for Last Five Years

2006-
2002- 2006-07 2003- 2004- 2005-
Iteams 2003-04 2004-05 2005-06 07
03 (P) 04 05 06
(P)
Cut & 21.33 29.60 6.04 -7.99
Polished
7110.57 8627.46 11181.56 11856.77 10909.82
Diamonds
192.07 178.46 192.75 233.53 246.56 -7.08 8.00 21.16 5.58
Coloured
Gemstones
Gold 1513.082680.92 3783.58 3863.23 5209.32 77.18 41.13 2.11 34.84
Jewellery
Other 112.90 132.82 161.94 187.97 190.33 17.64 21.93 16.07 1.26
Total 8928.6211619.7015319.8316141.5016556.0330.14 31.84 5.36 2.57
Rought -
240.88 535.84 357.86 566.89 564.82 122.45 58.41 -0.37
Diamonds 33.22
Net
9169.5012155.5415677.6916708.3917120.8532.56 28.98 6.57 2.47
Exports

India's Export of Gem & Jewelry (Destination-wise – 2005-06)

Future Forecast
The future growth of Indian jewelry industry lies in finding new markets and in adding
value. Worldwide, jewelry is a big business, which is extremely lucrative as margins are
high compared to diamonds, as branding can demand high premiums.

India was a late entrant to the global jewelry market and its industry took off after
establishment of the export processing zones in 1990, especially the special economic
zone in Mumbai that accounts for 40 % of India's exports. It has taken the country a few
years to incorporate international designs, styles and finishes.

The outlook for the industry is bright, but how much of this amazing performance will
actually translate into improved bottomlines will lie in the capability of individual
businesses to harness the potential of new markets and products. With intense
competition in market, the stock performance will depend on how efficiently, in terms of
both cost and marketing, companies can cut and polish diamonds and also venture into
the lucrative but difficult jewelery industry.

Gems & jewellery exports rise 4% in

April
May 19, 2011, 04.17am IST
Tags:

• Jewellery Export Promotion Council|

• India

AHMEDABAD: India's gems and jewellery exports rose marginally by 4.18% to 14,268
crore durng April. Exports of cut and polished diamonds have increased by 5%, while
silver jewellery exports rose by around 34% in April.

"The overall exports of gems and jewellery at $3,215.73 million ( 14,268.20 crore) in the
month of April 2011 is showing a growth of 4.48% (4.18% in rupee terms) as compared
to $3,077.76 million ( 13,696.02 crore) in the same period previous year. The overall
exports of cut & polished diamonds at $2,035.22 million ( 9,030.27 crore) in the month
of April 2011 have shown a growth of 5.53% (5.22% in rupee terms) as compared to
$1,928.60 million ( 8,582.26 crore) for the same period of previous year," according to a
press release by Gem & Jewellery Export Promotion Council (GJEPC).

It may be mentioned here that cut and polished diamonds accounted for 65.49% of the
total gem and jewellery export of India in the fiscal 2011. During 2010-11, India
registered 55% increase in the cut and polished diamond exports at $28,251 million.