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India’s gems and jewellery exports are likely to decline five to 10 per cent this year, due to slowing demand at major destinations such as China, Japan and the European Union (EU).
After a two per cent decline in dollar terms of these exports during the April–October period, Indian exporters were hoping for a rebound during the coming festive demand season.
However, says Vipul Shah, chairman of the Gems and Jewellery Export Promotion Council (GJEPC), “The overseas market has been sluggish. Overall economic sentiment remains weak. Since this sector is the first luxury item to get affected by a slowing economy, we estimate ornaments’ demand will remain sluggish.” His forecast, as mentioned earlier, is for a decline of five to 10 per cent.
This is significant, as gems and jewellery constitute around 13 per cent of our merchandise export. Data compiled by the GJEPC showed the exports under this head were $23,397 million (Rs 141,307 crore) in April–October, the first seven months of this financial year, against $24,123 mn (Rs 143,549 crore) in the corresponding period last year. In rupee terms, it was a three per cent fall.
In contrast, demand from America has shown a resurgence this festive season. The occasions of Christmas, New Year and Mothers’ Day constitute around 40 per cent of India’s overall annual gems and jewellery exports and America consumes close to this much of global jewellery output.
“For the past two-three years, overseas markets were cooling down. Jewellery export to China, the EU and Japan have seen a decline,” said Shreyas Doshi, chairman, Shrenuj & Company, a city-based diamond jewellery exporter.
From $43,211 mn in 2011-12, gems and jewellery export fell to $39,137 mn in 2012-13 and to $34,993 mn in 2013-14.
The growth in US jewellery sales will be inadequate to compensate for the decline from the other markets, said Shah.
