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Rising consumer interest from the United States has ensured that the country’s net polished exports rose 74% to $4.18 billion for the first half of the calendar year.
Author: Shivom Seth
MUMBAI – India has emerged as a strong contender in the global gems and jewellery market despite theworld-wide recession and its related setbacks. Demand revival from the traditional markets of the US and Europe is set to spur export growth, ensuring that the value of exports of gems and jewellery expands by around 25% this year.
Demand from the United States, which accounts for more than half of India’s gems and jewellery exports, has been steady and is expected to be rock solid in the coming months, according to traders. Gems and jewellery exports exceeded $28 billion in terms of value in 2009-10, up from $24.4 billion for 2008-09.
Polished diamond exports from the country jumped 79% to $2.2 billion in June 2010, though by volume, polished exports fell 2% year-on-year, as the average price increased 83% year-on-year to $495.01 per carat, according to data provided by the Gems and Jewellery Export Promotion Council. Gold jewellery exports rose to $ 610.4 million in June from $437.24 million of the previous year. The Council has noted that polished imports on the other hand, grew 84% in June 2010, to $1.46 billion, as net polished exports rose 69% year-on-year to $745.6 million.
Gurpreet Chhatwal, director of Crisil Ratings, which has compiled a report on the Indian diamond industry said that though actual consumption has shown an uptrend, restocking by retailers has also ensured a sharp turnaround in demand in the second half of 2009-10. Adding that most retailers maintained minimal inventory during the second half of 2008-09 and the first half of 2009-10, with several jewellers expecting the slump in demand to continue, Chhatwal said the second half of 2009-10 saw a dramatic reversal, with demand increasing significantly.
He added that over the medium term, this would ensure moderate buoyancy in exports by Indian players, despite the prevailing crisis in Europe.
It may be recalled that India’s net diamond account had registered a deficit of $1.19 billion as compared to $148.2 million, a year ago. However, an increase in demand from the US (and partly from Europe) in the month of June 2010, has ensured that gems and jewellery exports jumped 75% to $3.08 billion. Exports stood at $1.76 billion in the same month of the previous year, according to data from the Gems and Jewellery Export Promotion Council (GJEPC), a Mumbai-based organisation.
“There is good demand from the US market and we have noticed a significant upsurge even last month,” said chairman of GJEPC, Vasant Mehta. “Orders are also picking up in markets like China and Singapore where we have aggressively started marketing our diamonds,” he added.
Among the segments that registered maximum growth were cut and polished diamonds, which grew 78%, followed by gold jewellery that jumped 39% and coloured gemstones that saw an increase of 21%.
The sector, which took a drubbing due to the global economic crisis in September 2008, has seen a reversal in its fortunes, with a slight upsurge witnessed since November 2009. The UAE continues to be the main destination for Indian gems and jewellery, accounting for 31% of total exports, followed by Hong Kong and the US.