UBM Publication

India's Leading Gems & Jewellery Companies

In the Indian gems and jewellery industry, traditional, family-owned businesses co-exist with modern units. A large number of local manufacturers are setting up modern jewellery manufacturing units to stay competitive in the market.

The emergence of young customers is driving the need for branded jewellery, since these customers consider jewellery to be a fashion accessory rather than an investment. Branding fetches greater premium and therefore, higher margins. Organized retail currently accounts for merely 5-6% of total jewellery retail in the country. The increasing demand for luxury goods is expected to positively impact branded jewellery sales. Besides, mandatory Hallmark certification and buyback opportunity available across multiple stores will further push the organized retail jewellery market in the country.

India’s inherent strengths in the gems and jewellery sector such as skilled yet low-cost labour and the manufacturing excellence in jewellery making and diamond polishing augur well for the sector. India’s gems and jewellery sector holds significant growth potential in view of the country’s ability to leverage its strengths in meeting global demand. These strengths need to be used to create a strong ‘Brand India’ image in the global market. Brand India’s success would depend on incorporating international designs, styles, and finishes.

During FY10-12, exports recorded unparalleled growth aided by government initiatives, entrepreneurial skills of exporters, and skilled craftsmanship. The setting up of the Gem and Jewellery Skill Council of India (GJSCI) and the National Skill Development Corporation (NSDC) provided a major boost to craftsmanship. Despite belonging to the unorganised sector, the globalisation of the Indian gems and jewellery industry is phenomenal.

The sector is highly influenced by changing spending pattern of consumers and government regulations. With economic recovery taking place in major markets globally, consumers’ spending pattern is in favour of gems and jewellery.

Import restrictions on gold led to a drastic fall in imports by an estimated 47% in FY14, while exports of gold jewellery declined by 33%. With the CAD situation under control, rationalisation of import curbs is expected. The RBI has allowed 4 more banks to import bullion.

The diamond sector is upbeat following growth in imports of rough diamonds and exports of cut and polished diamonds, indicating higher levels of cutting and polishing activity in the country. Further, recovery in the US and European markets contributed to increase in demand for diamonds. Moreover, huge demand in rest of the international market will impact the sector positively. The government has increased the number of notified miners from 5 in 2007 to 9 in 2013 to promote the sector.

Indian diamantaires have successfully created a global marketing network. The Indian gems and jewellery units have set up offices in all the major international markets such as Antwerp, New York, London, Tokyo, Hong Kong, and Singapore.

The setting up of the Bharat Diamond Bourse, one of the largest in the world, is expected to make the country a leading diamond trading market.

The government is promoting global partnerships in the jewellery sector. The proposed collaboration with the Antwerp World Diamond Centre is likely to bolster India’s diamond cutting and polishing skills.

Changing demographics and increasing disposable income have driven the rise in demand for platinum jewellery. Besides, the narrowing price gap between gold and platinum jewellery is strengthening demand for the latter. Besides, the elite tag attached to platinum jewellery is boosting demand among young consumers.

Silver jewellery is yet another emerging star with a massive 59% surge in exports in FY14. Silver jewellery exporters are expected to benefit from the huge demand in the international market.

The future of the industry and of the players depends on upgradation of technology and skills, capital infusion, reinvention of product categories, creating higher value-addition, and finding new markets.