GEMS AND JEWELLERY

PRESENTED BY-

RAMAN verma

FLOW OF PRESENTATION
Overview Production Centers Domestic Industry Trend in Export Major Export Destinations Export from India for last three years Major Exporters in India Major Competitors in the global market Provisions in Indias Foreign Trade Policy Quality Standards Any other relevant Information

OVERVIEW

GEMS AND JEWELLERY

Gems and Jewellery is an important emerging sector in the Economy. Ranked among the fastest growing sectors, it is also a leading sector for foreign exchange generation. Major Segments The sector comprises of two major segments Gold Comprises around 80% of the Indian jewellery market, balance comprising fabricated studded jewellery (Diamonds and Gemstones). High levels of manufacturing and domestic consumption. Diamonds World's largest cutting and polishing Industry for diamonds. Well supported by the banking sector and government policies. Export potential for polished diamonds / finished diamond jewellery.

GEMS & JEWELLERY INDUSTRY

One of the fastest growing segments in the Indian economy with an annual growth rate of approximately 15 percent. The current market size of the Indian Gem & Jewellery Industry is US$ 25 Billion. Total export of gems & jewellery in the year April-March,2010 was 29081.11 with a 2.36% growth rate & 16.27% share in the total export. The domestic market was guessed to be approximately USD16.1 billion in financial year 2009. Consumes nearly 800 tonnes of gold that accounts for 20 percent of world gold consumption, of which nearly 600 tonnes go into making jewellery

CONTD
India's strength lies in the 2 million highly skilled workforces in the country in the gem & jewellery sector, out of which 1 million are exclusively engaged in export production. The Gem & Jewellery Industry has started showing positive signs of revival and growth.

DIAMONDS INDUSTRY
Largest diamond cutting and polishing centre in the world with 60 per cent value share, 82 per cent carat share and 95 per cent share of the world market in terms of number of pieces. In the period of 9 months from April to December09 exports of rough diamond declined by 37% to 157.09 lakh carats whereas the exports of cut & polished diamonds mounted by 18% to 407.36 lakh carats Nearly 9 out of 10 diamonds sold worldwide are cut and polished in India. Exported cut and polished diamonds worth US$ 14.18 billion in 2007-08.

Contd
Manufactures diamonds of all cuts, shapes and sizes of all varieties like round, princess, baguettes and all fancy cuts. Has democratized Diamonds by mastering the art of cutting near gem quality diamond.

Contd.
The GJ sector may be further categorized into the following sub-sectors based on characteristics, processing techniques, preciousness in terms of price range and marketability. 1. Gemstones Diamonds Colored Stones-precious, semi-precious, synthetic 2. Jewellery Plain gold Jewellery Studded Jewellery Silver Jewellery Costume Jewellery 3. Pearls

MAJOR PRODUCTION CENTRES IN INDIA

Source: official website of Gujarat ,as on 17/12/08.

Trends in exports

EXPORTS
Total export of gems & jewellery in the year April-March,2010 was 29081.11 with a 2.36% growth rate & 16.27% share in the total export. Exports posted a modest growth of 1.45 per cent during 200809 at US$ 21.1 billion, primarily driven by gold jewellery exports, including medallions and ornaments. The country exported US$ 20.8 billion of gem and jewellery in 2007-08.

The United Arab Emirates (UAE) was the largest importer of gems and jewellery from India in 2008-09, with a share of 31 per cent followed by Hong-Kong(25%) and U.S.A(20%).

CONTD
The sector accounted for 13 per cent of Indias total merchandise exports.

The export industry mainly comprises of small-to-large units based in various special economic zones (SEZs) supplying primarily diamond-studded jewellery

EXPORTS DATA
ITEMS CUT & POLISHED DIAMOND GOLD JEWELLERY COLOURED GEMSTONES ROUGH DIAMONDS 2005 53892.02 2006 2007 2008 2009(APR-OCT) 48905.57 57117.17 58649.45 45365.09

16498.21 975.07

22567.44 11637.12 9406.49 1062.27 1111.05 1197.55

5572.37 834.80

1865.49

2388.26

2280.32

3474.93

1992.95

VALUE IN CRORES

MAJOR EXPORTERS IN INDIA

TO CHINA
ROSY BLUE TANYA GEMS VENUS JEWELS

TO U.S.A DVL JEWELS PVT. LTD. ELEGANT COLLECTION DIATRENDS JEWELLERY PVT. LTD.

TO ITALY DWARKA GEMS JEWELS IN INDIA TAKAT GEMS IN INDIA FINE JEWELLERY

Major Exporters in India

RAGHUNANDAN PRASAD & SONS S. ZAVERI & SONS JEWELLERS JAGDISH & SONS RIBY GEMS AND FASHION JEWELRY BN GHOSH & CO. MARUTI JEWELLERS MILLENIUM STAR SILVER STONE SHRI RADHEY CHAIN DD JEWELLERS
17

Major Export Destinations

14.45 25.27 0.47

9.98

0.63 0.04

20.52 25.91 0.18 US A S ING A P O R E NE THE R L A ND ITA L Y 1.1 UA E 1.45 U.K G E R MA NY O THE R C HINA HO NG K O NG B E L G IUM

MAJOR PLAYER OF THE WORLD

Italy U.S.A

Hong Kong

UAE

Thailand India

IMPORT DATA
ITEMS 2005 2006 2007 2008 2009(APR-OCT)

ROUGH DIAMONDS

40039.14

38401.09 40170.65 40877.24 21898.13

GOLD BAR

7034.52

7905.74

9734.41

10820.32 13062.77

CUT & POLISHED DIAMONDS

16010.27

8832.61

17396.61 31209.45 27056.46

RS. IN CRORES

IMPORT TREND
45000 40000
I N C R O R E S

35000 30000 25000 20000 15000 10000 5000 0

2005 2006 2007 2008 2009(APR-OCT)

ROUGH DIAMONDS GOLD BAR

CUT & POLISHED DIAMONDS

Major Importers
LEVIN HEALTH CARE SUNSHINE CONSULTANCY SERVICES KRISHNAM HI INTERNATIONAL SHREEJI GEMS & SILVERS FAMMORE ENTERPRISES.PVT.LTD SHIBINS SARIT AXPORTS CONSORTIUM SANJAY EXPORTS MONTOSTONE
22

Net export from India for last two years

Net imports from India for last two years

Major Competitors in the global market

FTP PROVISIONS

Provisions in Indias Foreign Trade Policy

Schemes for Gold / Silver / Platinum JewelleryExporters of gold / silver / platinum jewellery and articles thereof may import their essential inputs such as gold, silver, platinum, mountings, findings, rough gems, precious and semi-precious stones, synthetic stones and unprocessed pearls etc. in accordance with the procedure specified in this behalf. Replenishment Authorization Exporters may obtain Replenishment (REP) Authorizations from RA in accordance with procedure specified in HBP v1.

GOVERNMENT INITIATIVES
100 percent foreign direct investment (FDI) in gems and jewellery through the automatic route is allowed. The government has lowered import duty on platinum and has exempted rough colored precious gems stones from customs duty.

Rough, semi-precious stones are also exempt from import duty.

CONTD
Setting up of SEZs and gems and jewellery parks to promote investment in the sector. The government abolished import duty on polished diamonds. The export of colored gemstones consignment basis has been allowed. on a

CONTD
Duty-free import of consumables for metals other than gold and platinum up to 2 percent of freight on board (f.o.b) value of exports. The government has raised the limit value of jewellery parcels for export through foreign post office (including via speed post) from US$ 50,000 to US$ 75,000 and the time period for re-import of branded jewellery remaining unsold has been extended from 180 days to 365 days.

CONTD
To neutralize duty incidence on gold jewellery exports, it has now been decided to allow Duty Drawback on such exports.

To promote export of Gems & Jewellery products, the value limit of personal carriage have been increased from US$ 2 million to US$ 5 million in case of participation in overseas exhibitions.

SPECIAL FOCUS INITIATIVE

Import of gold of 1 8 k and above is allowed under replenishment scheme subject to import being accompanied by an Assay Certificate specifying purity, weight and alloy content. Duty free import entitlement of commercial samples shall be Rs. 300,000.

Duty free re-import entitlement for rejected jewellery shall be 2% of FOB value of exports.

CONTD
Duty Free Import Entitlement (based on FOB value of exports during previous financial year) of Consumables and Tools, for: 1. Jewellery made out of: (a) Precious metals (other than Gold & Platinum) 2% (b) Gold and Platinum 1% (c ) Rhodium finished Silver 3% 2. Cut and Polished Diamonds 1%

CONTD
Extension in number of days for re-import of unsold items in case of participation in an exhibition in USA increased to 90 days. In an endeavor to make India a diamond international trading hub, it is planned to establish Diamond Bourse (s).

QUALITY STANDARDS
Maintains strict quality control and adheres to world quality standards such as: ISO 9000-2000 Business Excellence Model Best Practice Principles

GJF has created a brand "TRUST MARK based on high standards.

Quality Standards
Trust mark is an assurance to a customer of the commitment of the jewellery for his quality & best business practices

HALLMARK CERTIFICATION
Hallmarking is the accurate determination and official recording of the proportionate content of precious metal in gold. Hallmarks are thus official marks used in many countries as a guarantee of purity or fineness of gold jewellery. BIS was named as the sole agency in the country for Hallmarking of gold jewellery under the provisions of the BIS hallmark Act, 1986. BIS, as the National Standards Body of India is primarily engaged in the preparation and promotion of standards and operation of different quality certification schemes. In this context, the BIS Precious Metals Sectional Committee (MTD 10) has formulated and published the following Indian Standards on Gold and Gold Alloys: a) IS 1417 Grades of gold and gold alloys, Jewellery/Artefacts-Fineness and Marking b) IS 1418 Assaying of Gold in Gold Bullion, Gold alloys and Gold Jewellery/ Artefacts - Cupellation (Fire Assay Method) c) IS 2790 Guidelines for manufacture of 23,22,21,18,14 and 9 carat gold alloys d) IS 3095 Gold Solders for use in manufacture of Jewellery

Problems and Challenges

Challenges: Rising gold prices, Dependence on raw material import. Emerging threat from other countries. The majority of players operating in the sector have still not adopted the best practices from the corporate culture.

Contd..
The major problems faced by gem and jewellery exporters in sourcing their capital requirements are as follows: High interest rate being charged by the banks on export credit. Scarcity of dollar credit for sourcing of rough diamonds. Reduction in sanction on extension of credit limits to gem and jewellery exporters. Biased rating of gem & jewellery firms by Credit rating agencies in India.