August is an important month for the Indian gems and jewelry
industry, with its flagship event — the India International Jewellery Show
(IIJS) — and it newest promotion — India International Jewellery Week
(IIJW) — both on the schedule. The show attracted more than 800 exhibitors,
including a sizeable overseas contingent, and the two events hosted more than
30,000 visitors, the highest attendance for the past several years.
Anmol Choksi, marketing manager of Kiran Jewels India,
noting the very good response from buyers at the show, said, “I can safely say
that this year our order size was double what it was in 2011. Still, overall,
there weren’t too many visitors placing confirmed orders. There is overstocking
throughout the industry and, as a result, fresh inventory is not being
purchased.”
Both the international and domestic buyers at the show
appeared to be very cautious and conservative. Overall, it was lower goods that
were being picked. VVS wasn’t on the agenda for many retailers simply because
they all have this feeling that their customers aren’t loosening their purse
strings in the current economic environment to spend on high-quality,
high-priced goods.
Rajiv Jain, chairman of the Gem and Jewellery Export
Promotion Council (GJEPC), the events’ organizer, reiterated the conservative
approach of show attendees. “The economy globally isn’t in good shape so it is
natural that players aren’t willing to take risks,” Jain said. “Also, the
prices of diamonds are not showing any stability so the market is adopting a
wait-and-watch attitude.”
For more on the Indian market, see Trade Report on page 18.
GOVERNMENT COMMITMENT
The commitment of the Indian government to the gems and
jewelry industry was demonstrated by the presence of Anand Sharma, Indian
minister of commerce and industry, who formally opened IIJS.
The international attendees at IIJS this year included
visitors from Bangladesh, China, Dubai, Hungary, Iran, Japan, Malaysia, Nepal,
Poland, Russia, Saudi Arabia, Singapore, Hong Kong, Turkey and many more.
Entire delegations attended from Thailand, Belgium, Israel, Turkey, Hong Kong,
the United Arab Emirates (UAE) and more than a dozen other countries.
A participant from Turkey who wished not to be named said,
“We are satisfied with the organizers and also the overall presentation of the
show. Though we have not received a lot of inquiries from the visitors, based
on the large number of attendees, it is definitely a very good place to be.”
REVIVING ANCIENT ARTS
One highlight of IIJS 2012 was the council’s initiative in
promoting local artisans practicing the traditional art forms of bidri, bamboo,
filigree and patwa. GJEPC’s Gem and Jewellery Skill Council of India has
focused on building a greater awareness of these niche design talents and
creating a market at home and overseas for their products, according to Jain.
IIJW was held prior to the show at the Hyatt Regency in
Mumbai from August 19 to 23. Like past editions of the event, it met with a lot
of public interest because of the high-profile participation of the media and
Bollywood. The glamour quotient this year was the presence of more Bollywood
celebrities than ever before walking the runway showcasing the designer and
branded jewelry.
GJEPC Vice Chairman Sanjay Kothari said, “India is now very
much responsive to buying diamond jewelry and we will make efforts to further
the demand and consumption of diamond jewelry. We intend to allocate during the
coming years close to $3 million annually toward various diamond jewelry events
and promotions.”
DIAMOND DEVELOPMENT
Other good news in the month of August was the announcement
by Rio Tinto that it plans to invest approximately $500 million in developing a
diamond mine at Bunder in Madhya Pradesh (MP). The project is slated to begin
commercial production in 2016.
In line with this initiative, the MP state government is in
talks with investors to set up a base in Madhya Pradesh and it also has
allocated a 35-acre piece of land to set up a diamonds, gems and jewelry park
in the Rangwasa village of Indore. The government’s goal is to transform Indore
into a hub like Surat. To further those efforts, GJEPC’s Jain met with the MP
Chief Minister Shivraj Singh Chauhan, asking for tax relief for the move.
“The diamond processing industry across the country is
currently paying a uniform 33 percent tax to the government,” Jain said. “We
are seeking anything lower than the prevailing tax and a long-term commitment
from the state government of MP for considering an investment plan or else it
makes no sense to shift manufacturing units from Surat to Indore.”
THE MARKETPLACE
• Activity continues to be slow in rough and polished goods.
• Demand is better for SI-I1 goods.
• The liquidity crunch is strongly felt in the Indian market.
• Financial failures of many small to medium companies are
being reported in the market.
• Weak export demand continues to keep Indian manufacturing at
low production levels.
Article from the Rapaport Magazine - September 2012. To subscribe click here.