What DeMo? Jew­ellers Buy More Gold Than Be­fore

Lat­est B2B jew­ellers’ ex­hi­bi­tion shows that buy­ers ap­pear un­af­fected by de­mon­eti­sa­tion, .₹ 3-lakh cap on cash pur­chases

The Economic Times - - Finance & Commodities - Ram.Sah­gal@ times­group.com

Mum­bai: In­dia’s gold de­mand in the on­go­ing wed­ding sea­son has been ro­bust, un­dented by con­cerns over de­mon­eti­sa­tion and the .₹ 3-lakh cap on cash pur­chases, ac­cord­ing to the Gems and Jewellery Ex­port Pro­mo­tion Coun­cil (GJEPC), which has re­ceived en­cour­ag­ing re­sponse in the on­go­ing B2B jew­ellers’ show, IIJS Sig­na­ture. The de­mand has prompted or­gan­is­ers to re­tract their de­ci­sion to cut the du­ra­tion of the show to three days from four.

GJEPC said or­ders placed by jew­ellers with or­na­ment man­u­fac­tur­ers at this year’s show will ex­ceed last year’s .₹ 1,375 crore by at least 10%.“We ex­pect or­ders to be up­wards of .₹ 1,500 crore this year (at this year’s show),” said Sabyasachi Ray, ED, GJEPC. “That will be more than the .₹ 1,375 crore or­der value pegged by mar­ket re­searcher Ip­sos last year.”

An­other se­nior GJEPC of­fi­cial con­firmed that “in light of the re­sponse” to the show, the or­gan­iser had de­cided to keep the show on for the full four days in­stead of three. The show is on from Feb 6-9.

“We ex­pected de­mon­eti­sa­tion and the re­cent cap on pur­chases above .₹ 3 lakh to dent busi­ness and sen­ti­ment, but nei­ther has hap­pened go­ing by the re­sponse we’ve got,” he said on re­quest of anonymity as he is not au­tho­rised to speak with the press.

IIJS Sig­na­ture is a vari­ant of the larger IIJS that GJEPC or­gan­ises in Au­gust every year ahead of the fes­tive sea­son be­tween Septem­ber and De­cem­ber, when 60% of In­dia’s an­nual gems and jewellery sales, es­ti­mated at $39 bil­lion, take place, ac­cord­ing to Ray. Re­main­ing sales hap­pen from Fe­bru­ary-June, which is when de-

mand pick-up for wed­ding sea­son com­pels re­tail­ers to re­stock. The IIJS Sig­na­ture is held be­fore this event.

The show wit­nesses par­tic­i­pa­tion by the likes of re­tail­ers like Tan­ishq, PC Jew­eller, TBZ The Orig­i­nal, etc and Laxmi Di­a­mond, a DeBeers sightholder which sells or­na­ments to some of the lead­ing jew­ellers.

Biju Pat­naik, head of the gems & jewellery busi­ness at In­dusInd Bank, told ET that the “up­beat” re­sponse (to the show) proved that the ad­verse fall­out from de­mon­eti­sa­tion and to a lesser ex­tent from the re­cent cap on cash pur­chases ap­pear to have “al­most faded out”.

“Peo­ple are us­ing cheques and cards to pur­chase jewellery,” said Pat­naik.

Ashok Ga­jera, part­ner, Laxmi Di­a­mond, agreed. “De­mand is most cer­tainly im­prov­ing and I think would get even bet­ter with time. That’s why jew­ellers are plac­ing good or­ders at the show. Cus­tomers are get­ting used to cheque and on­line modes of pay­ment.”

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