After a five per cent decline in FY18, jewellers believe there would be a 10 per cent jump in India’s gem and jewellery export for the current financial year.
They point to demand from new markets, depreciation in the rupee against the dollar and increases in diamond prices.
India’s $41-billion gem and jewellery export industry has been exploring opportunities in Latin America, Southeast Asia and Cambodia. Also, a sharp rise in segment export to the European Union, led by the United Kingdom and France, has raised hope.
“We have attained growth in cutting and polishing, and proved India’s leadership. The next phase of growth would come from diamond price rises. Also, recovery in the US economy means more disposable income for consumers; the US takes around 45 per cent of India’s overall gem and jewellery export,” said Colin Shah, vice-chairman, Gems and Jewellery Export Promotion Council (GJEPC).
Diamond prices have risen at a compounded annual rate of around 3.5 per cent during the past 10 years. The rupee has lately fallen by about two per cent. New markets would add to the orders, says Shah.
Gem and jewellery export fell a little below $41 billion (Rs2,641 billion) in 2017-18, from $43.2 billion (Rs2,892 billion) in 2016-17.
Growth in the sector was primarily driven by the cut and polished diamonds (CPD) segment, up 4.2 per cent to $23.7 billion in FY18. Total volume here was 34.86 million carats, as compared to 32.21 million carats in FY17. Gold jewellery export rose 10.9 per cent to $9.7 billion .
“While India is undisputed leader in CPD export, with 14 out of 15 roughs mined globally being processed here, the country is facing stiff competition in gold jewellery from Dubai, Hong Kong, Turkey and other centres. But, our gold jewellery export would continue to grow at the same pace in FY19,” said Pramod Agarwal, chairman, GJEPC.
Our gem and jewellery export to the United Arab Emirates (UAE) were hit due to a five per cent value added tax by the government there, effective January 1. UAE’s share in India’s overall gem and jewellery export fell to 25 per cent for FY18, from 32 per cent the previous year.
Shah said India’s export business was shifting to Hong Kong from the UAE, mostly for redirection (meaning further export to other destinations).