Domestic jewellery industry to double in five years : Report

The domestic gems and jewellery industry is likely to double in the next five years on growing demand of bullion for investment and ornaments for household consumption and gifting purposes. A study titled “All that glitters is gold : India Jewellery Review 2013” conducted by the global consultancy firm A T Kearney, forecasts India’s gems and jewellery market to achieve the size of Rs 500,000 – 530,000 crore  by 2018 from the level of 251,000 crore in 2013. Industry body Ficci associated with its publication.

In 2012-13, the industry drove jewellery exporters to the tune of Rs 227,000 crore, outperforming textiles and apparels by a huge margin of 25%. The industry also drove value addition of more than Rs 99,000 crore which is comparable to several large industries such as apparel manufacturing.

The investment demand in the form of bars and coins could potentially reach Rs 180,000 – 190,000 crore by 2018 from the level of Rs 85,000 crore in 2011-12. This assumes that the current macroeconomic environment and industry ecosystem persists. The future growth in the domestic gems and jewellery market is thus expected to be impacted by the low-growth outlook for the Indian economy. It also assumes that the current import restrictions will be removed and there will not be any limiting effect of raw material supply, the study finds.

The industry plays a significant role in the economy through its contribution to employment generation, exports and value additions. However, it caters to two very distinct demand – consumption and investment – with very different needs and challenges.

Some of these challenges including high import dependence and limited domestic recycling, limited financing options for the industry and over regulated consumption industry and under regulated investment industry etc can impact the industry’s performance and contribution to the economy if they are not addressed, it added.