Surge in gold prices unlikely to turn NRI shoppers away

A strong rupee and the highest gold price in 28 years notwithstanding, Gujarat's jewellers are keenly looking forward to the NRI shopping season.

During the NRI season, which spreads over from mid-November till January, non-resident Gujaratis flock to the state and one of the main items on their agenda apart from availing themselves of medical services, is gems and jewellery shopping.

Though the stronger rupee and high gold prices may pinch their pockets, jewellery industry experts say the sales might actually increase. Ethnic designs, increased faith of buyers in the gold prices and fixed budgets of NRIs may save the day for jewellers.

"When NRIs visit India they have a fixed budget for jewellery shopping. Irrespective of the circumstances, they will spend that amount in India. Moreover, shopping from India will always be beneficial for them as labour charges are much less and so they get value for their money," reasons Shantibhai Patel, president, Gem & Jewellery Trade Council of India (GJTCI) and owner of Ahmedabad-based Jaykrishna Jewellers.

Patel added that during the NRI season sales increase by 20 per cent and this time, he expected it to go up to 25 per cent.

"One of the major reasons behind stronger rupee and high gold prices not affecting the NRI buying is because they prefer our ethnic designs. These designs and refined gems cannot be bought from anywhere else in the world," said Aagam Sanghavi, director (strategic planning), Sanghavi group, which owns the Sangini brand.

On the contrary, Sanghavi feels that increased gold prices would have a positive effect on the buyers.

"The higher gold prices have increased the faith of the buyers investing in gold and it will be always beneficial for NRIs too," he said.

CP Vanani, president of the Surat Diamond Manufacturers' Association, also seconds the view: "NRIs know that they get value for their money when they buy quality jewellery from India. Most of the NRIs are Gujarati and Gujaratis buy gems and jewellery as an investment. Prices of diamonds and gold will only increase in the future. So, irrespective of any currency situation this investment will always be a less risk investment."