The sluggishness in economies of the US and European countries continues to eclipse India’s Gem & Jewellery sector as the annual export-import figures of 2012-13 recently declared by the Gem & Jewellery Export Promotion Council (GJEPC) suggest.
The year gone by (2012-13) has reflected a mixed sentiment of performance as India’s exports went down by more than 9% to $39.03 billion during this year as compared to $43.09 billion during 2011-12. The deficit is responsible to weak demand from the US and western countries. However, the sector is expected to see a turnaround during 2013-14.
Commenting on the results, Mr. Vipul Shah, Chairman of the GJEPC said, “This apart, the outlook of India’s G&J sector for 2013-14 looks optimistic with an anticipated growth of 12-15%. The US and Japanese jewellery markets would spring back with an estimated 5% growth, while China will remain steady at 10% growth.”
However, India’s G&J sector remains on the top position as the highest contributor to the government Exchequer with a contribution of US $ 2,132.82 million in terms of foreign exchange earnings which went up by 154% as compared to the same period of 2011-12. India’s gem and jewellery sector make up for about 14% of its total exports.
It may be noted here that the Economic Advisory Council to India’s Prime Minister had said recently that gem and jewellery exports will see an increase of 12% during 2013-14 which would help minimize the current account deficit (CAD). Reducing gold prices would also prove to be another promoting factor for jewellery demand.
Imports of rough during 2012-13 went up by 12.65% which would give a boost to the cutting, polishing and other manufacturing activities in India. The sector also witnessed an increase in manufacturing activities indicated by the 33% growth in the export of gold jewellery which contributed significantly to the country’s foreign exchange earnings and supported balance of payments. On the other hand, imports of cut and polished diamonds dropped down significantly by 61.45% which played a major role in cutting down India’s foreign exchange spending. Total gem and jewellery exports for the year 2012-13 were US $ 39.033 billion.
Mr. Shah clarified that the exports were radically affected up to 35-40% because of the European crisis. However, the US, Japanese markets remained stable.
“At a time when India’s G&J sector is going through a challenging period, its regulations related to the re-introduction of bonded warehouse facility for the country’s diamond exporters and amendments in duty drawback rate facility for gold jewellery exporters have helped the sector to reinforce itself further. The GJEPC also claps the Indian government’s efforts for accepting recommendations of Taskforce Group to make India a global diamond trading hub,” Mr. Shah added.
It is under this positive backdrop, some new possibilities are seemingly forming up with the hope for a more positive push from regulatory measures like introduction of consignment imports of diamonds, commencement of rough diamonds’ tenders and auctions in India and founding of a committee to study lending norms for banks to the sector. So India’s G&J sector now stands hopeful of further growth.
