Gem, jewellery exporters bank on Christmas demand

Christmas is a major occasion for gems and jewellery exporters and this time the demand is crucial because of the slow growth in exports seen so far in the current financial year.

Colin Shah, vice-chairman, Gem and Jewellery Export Promotion Council (GJEPC), said: “The gems and jewellery demand in the US is optimistic. India’s exports of gems and jewellery is expected to be encouraging in the US markets during Christmas, backed by rising GDP growth, employment and private consumption.”

According to the data compiled by the GJEPC, the US market has been crucial for India. India’s overall gems and jewellery exports did not grow during 2018-19, but in the first seven months, exports of cut and polished diamonds to the US grew by 14.7 per cent to $5.4 billion while gold jewellery exports grew by 13.1 per cent to $9.1 billion. India’s overall gem and jewellery exports fell 4.4 per cent to $18.7 billion.

Colin Shah also said “since the jewellery demand in the US has rebounded, India’s exports are likely to grow further in the coming months also. Even trade war has not impacted the US demand for gems and jewellery and hence its imports from China and India have continued growing.”

However, challenges are prevailing for other two major markets.

Hitesh Shah, managing director, Renaissance Jewellery, said: “Jewellery retail sales in the US are robust at the moment and we are expecting a thriving business during Christmas this year. However, the European and West Asian markets appear to be soft and challenging.”

Elaborating on the challenges of European and West Asian markets, Shah said jewellery as a category had to compete with electronic gadgets, branded products, and other lifestyle categories of products.

Another challenge, according to him, is the emergence of lab-grown diamonds. Exporters are negotiating all these hurdles in the business.

The gems and jewellery sector has been watching the demand trends because exports have been falling for the past few months. In the first seven months of 2018-19, gem and jewellery exports fell ; however, in October the trend turned positive.

The sector was not looking encouraging because of poor performance of exports of silver jewellery, gold medallions and coins. Standalone exports of gold jewellery and cut and polished diamonds have done well.

Cut and polished diamonds and gold jewellery have recorded positive growth of around 8 per cent and 44 per cent during this financial year. Commodities like coins, silver jewellery and pearls recorded sharp negative growth rates.