UBM Publication

India's Leading Gems & Jewellery Companies

Gems and jewellery market plays an important role in the Indian economy, contributing approximately 6-7% of the country’s GDP, besides earning substantial foreign exchange and providing employment to more than 2.5 million people. Gems and jewellery, one of the fastest growing sectors over the past few years, is highly export oriented and labour intensive. Besides, the industry generates substantial value addition through cutting and polishing of rough diamonds and jewellery retail. The government of India declared the sector as a thrust area for export promotion based on its potential for growth and value addition. Substantial investment in new technology, skill, and design development is needed to tap the full potential of the sector. The government has undertaken various measures to promote investments and to upgrade technology and skills to promote brand India in the international market.

Export and Import Scenario

Gems and jewellery exports dropped by 11% in FY14, to US$ 34.7 bn, from US$ 39.06 bn in FY13. The decline was attributed to lower exports of gold jewellery and medallions, which in turn were the result of lower imports of gold bar and jewellery. Exports of coloured gemstones also fell by 20% and amounted to US$ 519 million. Cut and polished diamond exports increased by 12.6% in the year. Silver jewellery exports increased by a strong 58.57% totaling US$ 1460 million.

Imports of gems and jewellery imports fell from US$ 37.5 bn in FY13 to US$ 30.8 bn in FY14 primarily due to a 50% fall in gold imports in FY14. Rough diamond imports increased by 12%, while that of rough colored gemstones increased by 14%. Imports of cut and polished diamonds picked up in FY14, with a 17% rise YoY after recording a 30% decline in FY12 and a 61% decline in FY13.

Gold jewellery and diamonds – the major segments

The gems and jewellery industry in India caters to domestic and export demand. The market is classified into gold jewellery and diamonds, which account for more than 90% of the market value. India is the largest global consumer of gold, with nearly 20% share of the world’s consumption. Further, India is the world’s largest centre for cutting and polishing diamonds, exporting nearly 95% of the world’s diamonds.

Important Centers of Gems and Jewellery sector in India

Jaipur (Rajasthan) is a major centre for polishing precious and semi-precious gemstones.
Surat (Gujarat) is the world’s leading diamond processing center.
Mumbai (Maharashtra) is the centre for machine made jewellery and the largest wholesale market in India in volume terms. Delhi and its neighbouring states are popular for manufacturing silver jewellery and articles.
Kolkata (West Bengal) is famous for lightweight plain gold jewellery. This kind of jewellery is in high demand in Tamil Nadu. Hyderabad (Andhra Pradesh) is the centre for precious and semi-precious studded jewellery.
Nellore (Andhra Pradesh) is a key centre for handmade jewellery that is supplied to the Chennai market.
Belgaum (Karnataka) and Nellore specialise in jewellery studded with synthetic stones.
Coimbatore (Tamil Nadu) specialises in casting jewellery.
Trichur (Kerala) is a key source for lightweight gold jewellery and diamond cutting.

 

Value chain of the sector

  1. Mining There are very few commercially viable diamond mines operating in the world currently. Open pit mining, underground mining, and extraction from alluvial deposits are the three ways in which diamonds are sourced. The rough diamonds that are sought from mining are then sorted in different categories according to the quality, shape, colour, and size. The diamonds that are not good in quality are used for industrial purposes and the good quality diamonds are sent for further processing.

  2. Processing Processing is the next and the most important step, since the greatest value addition takes place at this stage. Diamonds are sorted, graded, and valued at this step, after which they are sent for further processing. Not all countries that produce diamonds also process them. The sorted and graded diamonds are sent to the cutting and polishing centres such as Antwerp (particularly highvalue diamonds), Tel Aviv, Israel (for medium-value diamonds), India (for low value diamonds), China, Johannesburg, New York, and Thailand. These processed diamonds are then exported or sold in domestic markets as finished diamonds or diamond studded jewellery.

  3. Manufacturing and Retailing Once the diamonds are processed, they are sold to manufacturers directly or through registered diamond exchanges. Much of the value addition is done at this stage, since the diamonds are converted into jewellery. Jewellery making has high margins and therefore, many cutting and polishing centres across the globe are aiming to move up the value chain to gain maximum revenue. The jewellery that is manufactured from the diamonds is sold either through a wholesaler or directly in the retail market, domestically or internationally.

    India is not a major miner of precious metals and stones such as diamonds but it is the largest processor of diamonds in the world owing to its skilled labour and low cost of processing.

Gross bank credit to the sector The gems and jewellery sector is supported well by government policies and the banking sector. According to a report by the RBI on Gross Bank Credit (GBC), credit to the gems and jewellery sector has registered CAGR of 19.7% during 2008-2013, growing from ` 251 bn as on March 2008 to ` 611 bn as on March 2013. The gems and jewellery sector accounted for 2.7% of the total GBC disbursed during 2013, from 2.9% in 2006.

Challenges Faced by the Industry