Professional Documents
Culture Documents
Executive Summary...3
Advantage India.....4
Strategies Adopted...14
Success Stories....22
Industry Associations......25
Useful Information........27
EXECUTIVE SUMMARY
Indias gems and jewellery sector has been contributing around 13-15 per cent over the past five years to
Contribution to GDP and Indias total merchandise exports and employs over 4.64 million employees.
Employment
The sector contributes about 6-7 per cent to Indias Gross Domestic Product (GDP).
India is the largest manufacturer of cut and polished diamonds in the world and exports 93 per cent of its
production.
Diamonds processing India exports 75 per cent of the worlds polished diamonds as of 2016.
and exports
Indias share in the global diamond market is 60 per cent in value terms and 90 per cent in volume terms.
Today, 12 out of 14 diamonds sold in the world are either polished or cut in India.
Indias gems and jewellery sector is one of the largest in the world contributing 29 per cent to the global
Market Size jewellery consumption. The sector is home to more than 300,000 gems and jewellery players.
Its market size is about US$ 54.58 billion of which 55 per cent is accounted by the unorganised sector.
The overall net exports of gems and jewellery stood at US$ 35.59 billion during FY2016-17 registering a
Robust growth in growth of 9.07 per cent over FY 2015-16.
exports Exports of cut and polished diamonds registered a growth of 10.24 per cent; gold jewellery registered a
growth of 1.92 per cent, while silver jewellery registered a growth of 35.87 per cent during FY2016-17.
Indias gems and jewellery imports increased at a compound annual growth rate (CAGR) of 7.84 per cent
Import trends from US$ 11.63 billion in FY2004-05 to US$ 28.78 billion in FY2016-17.
ADVANTAGE INDIA
ADVANTAGE INDIA
The Indian middle class is expected to rise to The Government of India has permitted 100
547 million by 2025 and this rise of young per cent FDI under the automatic route in this
Indian middle class worker is expected to sector.
lead to an increase in demand for gold.
The Government of India has levied 3 per
Also, Indias population is increasingly cent Goods and Services Tax (GST) on gold,
becoming urbanised, which is expected to gold jewellery, silver jewellery and processed
boost household income, thereby leading to diamonds and 0.25 per cent on rough
higher demand for gold and other jewellery. diamonds.
MARKET OVERVIEW
AND TRENDS
NET EXPORTS OF GEMS AND JEWELLERY
Net
Visakhapatnam
exports of gems
port
and
traffic
jewellery
(million
(US$
tonnes)
billion)
India is one of the largest exporters of gems and jewellery and the
industry is considered to play a vital role in the Indian economy as it CAGR 7.01%
contributes a major chunk to the total foreign reserves of the country. 50.00
43.21
43.05
FY17. 40.00
39.14
The net exports rose from US$ 15.66 billion in FY2004-05 to US$
35.00
36.22
35.59
35.59 billion in FY2016-17.
34.99
32.63
The overall net exports stood at US$ 35.59 billion during FY2016-17 30.00
29.44
registering a growth of 9.07 per cent over FY2015-16.
25.00
24.89
The exports stood at US$ 11.12 billion between April-July 2017.
20.00
20.92
UAE, US, Russia, Singapore, Hong Kong, Latin America and China
are the biggest importers of Indian jewellery.
16.70
17.16
15.00
15.66
US, Hong Kong and UAE accounted for 75 per cent of the total gems
10.00
11.12
and jewellery exports from India during FY 2016-17.
5.00
0.00
Notes: * - Data from April-July 2017, CAGR Compound Annual Growth Rate.
Source: GJEPC, Media sources
Indias exports 93 per cent of its cut and polished diamonds Exports
Visakhapatnam
of cut and polished
port traffic
diamonds
(million(US$
tonnes)
billion)
produced.
India exports 75 per cent of the worlds polished diamonds. CAGR 6.13%
30.00
Today, 12 out 14 diamonds sold in the world are either cut or
28.22
polished in India.
25.00
Indias exports of cut and polished diamonds rose from US$ 11.16
24.50
billion in FY2004-05 to US$ 22.78 billion in FY 2016-17, thereby
23.36
23.16
22.78
registering a compound annual growth rate (CAGR) of 6.13 per cent.
20.00
20.67
India exported US$ 7.42 billion worth of cut and polished diamonds
18.24
between April-July 2017.
17.43
15.00
14.80
14.21
11.83
11.16
10.00
10.91
7.42
5.00
0.00
Notes: * - Data from April-July 2017, CAGR Compound Annual Growth Rate.
Source: GJEPC
42.72
42.45
Indias imports of gems and jewellery stood at US$ 10.68 billion 40.00
between April-July 2017.
37.55
35.00
30.00
31.34
30.87
28.85
28.78
25.00
24.31
23.00
20.00
18.65
15.00
14.08
14.05
11.63
10.00
10.68
5.00
0.00
Notes: * - Data from April-July 2017, CAGR Compound Annual Growth Rate.
Source: GJEPC
India exports of gems and jewellery are composed of a variety of Share of various segments in total gems and jewellery
items like cut and polished diamonds, gold and silver jewellery, gold exports during FY2016-17
medallions and coins, coloured gemstones, pearls and synthetic
stones, rough diamonds etc.
0.22%
0.58%
Cut and polished diamonds account for the highest share of 52.74
per cent in total gems and jewellery exports as India exports 75 per 9.31% 3.47%
cent of the worlds polished diamonds.
0.97%
Gold jewellery accounts for the second highest share of 20.19 per
cent followed by gold medallions and coins with a share of 12.52 per
12.52%
cent and silver jewellery with a share of 9.31 per cent.
Rough diamonds account for 3.47 per cent of the total gems and 52.74%
jewellery exports.
20.19%
Source: GJEPC
India is one of the largest gold jewellery exporters of the world and it Gold
Visakhapatnam
jewellery imports
port and
traffic
exports
(million
(US$
tonnes)
billion)
exports to around 160 countries.
14,000
Indias gold jewellery exports grew from US$ 5,687 million in FY08 to
US$ 8,722 million in FY17.
13,038
12,000
Indias gold jewellery exports highly exceed its imports as can be
seen from the graph.
10,000
Mostly high-end jewellery or machine-made jewellery is imported
10,029
9,904
9,755
usually from Middle East or South East Asia.
8,851
8,722
8,000
8,557
8,367
Virtually imports do not consist of hand made jewellery as that is
7,901
Indias area of expertise.
4,546
6,000
About 50 per cent of jewellery exports are plain gold jewellery sets or
5,687
chains made in Mumbai, Kolkata and other cities from Southern India
and exported mainly to UAE, Hong Kong and Singapore; 30 per cent 4,000
2,100
are in the form of diamond jewellery mainly manufactured in Mumbai
1,020
and exported to US, UAE and Hong Kong; and remaining 20 per cent 2,000
660
577
400
400
366
290
273
precious and semi-precious gem jewellery manufactured in western
Indian states like Rajasthan and Gujarat and exported to UAE and
-
UK.
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17 P
Imports of gold jewellery Exports of gold jewellery
Source: GJEPC
Threat of Substitutes
Low Bargaining power of suppliers High Competitive rivalry in this Low Buyers do not have a
is low as the value of orders is quite sector is very high as there are a bargaining power as the price of gold
high and the rates are usually fixed. large number of players with similar is market regulated and therefore it is
products and the customers do not fixed. Also, prices of other gems and
have a switching cost. stones is also fixed by the sellers and
is usually similar across sellers,
Negative Impact
STRATEGIES
ADOPTED
STRATEGIES ADOPTED
Companies are indulging in expansion to more and more cities as well as expanding across the value chain.
Expansion and opening
Retailers are focusing on opening exclusive showrooms especially in Tier I cities to attract the urban
of exclusive showrooms customers.
Retailers in India have started selling their jewellery online. The growth of online jewellery is driven by
increasing internet penetration rates, growth in high net worth individuals population and availability of low
online jewellery prices.
Online selling by gems
Some companies have also tied up with e-commerce companies like Amazon India for selling their jewellery;
and jewellery retailers for example Joyalukkas.
Majority of the players in the Indian market have started selling jewellery online; for example Malabar Gold,
Tanishq, Tribhovandas Bhimji Zaveri, PC Jeweller, etc.
Buyback guarantee on Companies are also giving buy back option to customers on jewellery within certain days after the purchase
gold jewellery and based on certain terms and conditions.
Companies have also started providing financial facility to their customers who cannot afford to pay the whole
Finance facility amount at once.
EMI payments for jewellery; certain companies like Caratlane are providing EMI at 0 per cent interest.
Companies have also started selling customised jewellery for customers who prefer to have their jewellery
Customised jewellery altered as per their own preference; for example Malabar Gold.
GROWTH DRIVERS
AND OPPRTUNITIES
INCREASING MIDDLE CLASS POPULATION IS
EXPECTED DRIVE GROWTH IN THE FUTURE
As income rises, so does savings and Indians prefer buying gold with
their savings as they consider gold as an important form of 10%
investment.
9%
8%
Also, during festivals like Diwali and Dhanteras as well as during
weddings and other significant celebrations, people in India tend to
6%
spend a major amount of money on gold and other jewellery, all of
which are expected to drive demand of gold in the future. 5%
4%
2%
0%
2015
2020
2030
Source: World Gold Council
India has always been a major country with respect to gold demand. Visakhapatnam
Gold demand
portin
traffic
India(million
(Tonnes)tonnes)
Gold accounts for a major part of Indias total gems and jewellery
imports. 1,200
Indias gold demand was the second highest in the world from 2012-
2016.
1,000
In 2010 and 2011, Indias gold demand was the highest in the world.
1,002
974
959
In 2016, Indias gold demand stood at 666.1 tonnes.
914
857
800
833
666
600
400
200
0
2010 2011 2012 2013 2014 2015 2016
Cumulative Foreign Direct Investment (FDI) in diamond and gold Cumulative FDI inflow from April 2000 June 2017
ornaments in India FY08-17 rose at a compound annual growth rate (US$ million)
(CAGR) of 21.43 per cent.
1,200 CAGR 21.43%
Cumulative FDI between April 2000-June 2017 in the sector rose
from US$ 167.54 million as of March 2008 to 961.62 million as of
June 2017. 1,000
The Government of India has permitted 100 per cent FDI in the
961.62
sector through the automatic route.
895.96
800
The International Institute of Diamond Grading and Research
772.05
(IIDGR) has invested US$ 5 million for expanding its synthetic
696.48
diamond testing facility in Surat.
600
400
433.32
390.76
338.15
301.90
282.00
251.04
200
0 167.54
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18*
Notes: * As of June 2017
Source: DIPP
The Goods and Services Tax (GST) which was rolled out in July 2017 was in favour of the gems and
The Goods and Services jewellery sector.
Tax (GST) The Government of India has levied 3 per cent Goods and Services Tax (GST) on gold, gold jewellery, silver
jewellery and processed diamonds and 0.25 per cent on rough diamonds.
In the Union Budget 2017-18, the Government of India, offered tax cuts for the middle class and other
Union Budget 2017-18 sections of society (5 per cent for the Rs 250,000-500,000 tax slab; which was 10 per cent initially). All these
measures will drive consumption, which will be favourable to the gems and jewellery industry.
The Government of Indias proposal to cut corporate tax rates to 25 per cent for micro, small and medium
Corporate Tax Rate enterprises (MSMEs) having annual turnover up to Rs 50 crore (US$ 7.5 million) will benefit a large number of
gems and jewellery exporters from MSME category.
The Government of India has permitted 100 per cent Foreign Direct Investment (FDI) in the sector under the
FDI Policy automatic route.
The demonetisation move is encouraging people to use plastic money, debit/ credit cards for buying jewellery.
Demonetisation This is good for the industry in the long run and will create more transparency.
The Government of Indias announcement on establishing gold spot exchange could help in Indias
Gold spot exchange participation in determining gold price in the international markets.
Mr Arun Jaitley, Minister of Finance, Government of India, launched the Gold Monetisation Scheme in
November 2015. This scheme enables individuals, trusts and mutual funds to deposit gold with banks and
Gold Monetisation earn interest on the same in return.
Scheme
The designated banks accept gold deposits under the Short Term (1-3 Years) Bank Deposit as well as
Medium (5-7 years) and long (12-15 years) Term Government Deposit Schemes.
The Government of India launched the Sovereign Gold Bond Scheme. This scheme enables the Reserve
Bank of India (RBI) to issue gold bonds denominated in grams of gold individuals in consultation with Ministry
Sovereign Gold Bond of Finance.
Scheme
This scheme provides an alternative to owning physical gold. It is aimed at keeping a check on imports of
gold.
A jewellery park worth Rs 50 crore (US$ 7.8 million) is to be set up in Mumbai by the Government of India
Jewellery Park where locate handmade workers and factories will be relocated to develop their trade, improve their work
environment and standard of living.
The Government of India has approved the setting up of four common facility centres (CFCs) in Ahmedabad,
Amreli, Visanagar and Palanpur at a total cost of INR 16.15 crore (US$ 2.52 million); of which the CFCs at
Palanpur and Visanagar have already been inaugurated.
Common Facility
These CFCs are expected to provide access to a common pool of state-of-the-art machinery and equipment
Centres at a cheaper rate to small and medium diamond manufacturers; and it will also be used for transfer of
technology and r e-skilling and training of existing artisans.
A total of 200 small and medium manufacturers will receive access to the CFCs.
Source: Press Information Bureau, World Gold Council, Media sources, Aranca Research
CASE STUDIES
TRIBHOVANDAS BHIMJI ZAVERI (TBZ)
Tribhovandas Bhimji Zaveri is one of Indias oldest and most trusted Visakhapatnam
TBZ Revenue
port traffic
(US$ (million
million) tonnes)
jewellery brand.
It is one of Indias largest jewellery retailers. 350 CAGR 6.09%
303.62
The company was the first one to offer buyback guarantee on gold
285.21
jewellery, the first one to promote light weight jewellery, and the first
265.41
to offer certified solitaire diamonds. 250
259.33
258.55
The companys revenue has grown at a Compound Annual Growth
rate (CAGR) of 6.09 per cent over FY11-17.
216.13
200
Its revenue has grown from US$ 186.19 million in FY 2010-11 to
186.19
US$ 265.41 million in FY 2016-17.
150
100
50
0
FY11 FY12 FY13 FY14 FY15 FY16 FY17
1,336.56
1,336.56 in FY 2016-17. 1,200.00
1,150.53
1,000.00
1,001.14
800.00
837.71
600.00
629.84
400.00
200.00
-
FY13 FY14 FY15 FY16 FY17
INDUSTRY
ASSOCIATIONS
KEY INDUSTRY ASSOCIATIONS
Next to ICICI Bank, Bandra-Kurla Complex, Bandra - East Near Tunga International, Midc, Andheri (East)
Email: ho@gjepcindia.com
Website: www.gjepc.org
USEFUL
INFORMATION
GLOSSARY
US$: US Dollar
Wherever applicable, numbers have been rounded off to the nearest whole number
Year INR Equivalent of one US$ Year INR Equivalent of one US$
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