Jewellery industry awaits Christmas retail push

Until recently, the gem and jewellery industry in India had not seen saturation. But nowadays, the industry is facing competition in the luxurious gifts segment from white goods such as plasma TVs, iPods and the like. In addition, there are many other options of spending money.

Hence, 2006-07 may not be as good as it used to be. This year's target of exports may not be achieved. But there are some silver linings, which are triggered by the Christmas retail sale in the US.

If export to the US on the occasion of Christmas is any indication, then the diamond industry can wait for better days. All depends on further demand at the retail level in the US, where 50 per cent of the world diamonds is consumed.

"We all are waiting to see how demand at the retail level peaks up in Christmas, which will give real indications of the future trend," said Sanjay Kothari, chairman, Gem Jewellery Export Promotion Council.

"If the trend seen in Christmas is any indication and if it continues, then next year will be better for the industry," said Shreyas K Doshi, managing director, Shrenuj & Company. This year, Christmas demand started late but revived the confidence of the Indian diamond exporters.

Demand for Christmas has encouraged the Diamond Trading Company (DTC) to retain prices of the rough diamond, while allocating November sight on last week.

Indian exporters were expecting that DTC may cut rough prices or improve assortment as there was discrepancy in rough and polished diamond prices.

Now, tendency to stock rough diamonds are also changing with manufacturers maintaining stock as per requirements only. So, discrepancy in polished and rough diamond prices are reducing.

Another good sign is that the diamond polishing factories have also started working in full swing.

Kothari said, "It is becoming difficult to maintain the growth in the gem and jewellery exports, which is saturating." Still, he is waiting to see what happens at the retail level in the US.

He said that today, diamonds are not the only luxury item for those having disposable incomes. Plasma TV, iPods, high-end mobiles and even foreign tours are other options.