Rapaport Magazine

Show Starts Year on Upbeat Note

India Market Report

By Zainab A. Morbiwala

Ringing in 2012 was the first trade show of the year — India International Jewellery Show (IIJS) Signature 2012, held in Mumbai from January 6 to 9. Overall, the response was positive but exhibitors said it would have been even better with larger attendance from the U.S. and Europe. Rajiv Jain, chairman of the Gem and Jewellery Export Promotion Council (GJEPC), the show’s organizer, explained that “Had the show been in February, perhaps we would have seen a greater participation from visitors abroad, considering the entire Western world was just back from its long holiday season.”

With over 450 exhibitors and more than 10,000 visitors, the fifth edition of IIJS Signature set an optimistic standard for other 2012 trade events to follow. Vishal Doshi, group executive director, Shrenuj Group, reported that “IIJS Signature was a very busy event for us. Though the rising gold and diamond prices are a concern to the entire industry, demand at the show was better than expected. I must compliment the council for a well-organized event.” At the same time, Doshi suggested that “Perhaps, participation could be expanded further by promoting the show to India’s smaller tier-2 and tier-3 cities, where the real growth is happening. There might even be a designated day and time set aside especially for first-time visitors.”

Sucheta Khandwala, managing director of Hammer Plus Jewellery, said “fusion” jewelry that combines Western and Eastern styles was in demand and many manufacturers were offering wonderful traditional Indian-styled kundan jewelry with rose cut stones. “Diamond jewelry still led the way, though. No doubt the crowd was not as large as we usually see at the IIJS August show but at this show, we did have serious buyers.”

Jain agreed that sales were made at the show but admitted the start was slow. “The first day of the show did dampen the spirits of those present but from the second day onward, the exhibitors realized that the buyers present were serious buyers and there was serious business taking place. The loose diamond and gemstone category did not see a lot of interest but this could be because IIJS Signature is a show specifically for jewelry.”

Promoting Worldwide

In addition to its show calendar, GJEPC is spending almost $1 billion worldwide on promotions to boost the Indian gems and jewelry industry. The cooperative venture with the Ministry of Tourism’s “Incredible India” campaign holds special promise, especially since “Jewelry will now feature in each of the marketing campaigns undertaken by the ministry,” said Jain. At the same time as the national promotions are underway, Jain encouraged leading diamond miners and other industry stakeholders to join together and launch collaborative, generic promotions of diamonds and jewelry on their own. He said such efforts were even more important because of the growing competition the industry faces from other luxury and premium products.

Making India Proud

An Indian-produced ring has made it into the Guinness Book of World Records. The two-and-one-half-inch-tall, highly stylized 18-karat white gold ring created by Lobortas Classic Jewellery House of Kiev in the Ukraine is set with 2,525 miniscule diamonds supplied by Shrenuj and Co. Ltd. from its Surat factory. Valued at $1.3 million, it set a new world record as “the most diamonds set in one ring wearable on the human finger.”

Noting that Shrenuj has been working very closely with its customers on producing unique pieces of jewelry, Doshi explained that “When this concept of producing the Tsarevna Swan ring was shown to us, we were excited to produce the custom-made diamonds for this ring. Each diamond had to be perfectly calibrated to fit in its place since the challenge was to put in a record number of diamonds in a small ring. We are pleased that the end product came out more beautiful than we had imagined.”

Current Market Conditions

Talking about the market conditions, Jain said “The U.S. market is showing signs of improvement, but the European market is showing extremely weak demand. What we are seeing is a continued demand for low-quality goods, which is not a very healthy sign for the industry.”

Doshi is of the opinion that the “diamond market is quite volatile right now, with the frequent changes in diamond prices.   Clearly, the changes we have seen are not a factor of demand and supply but are more speculative in nature. We know this because demand over the past three months has been on the level of what was predicted and what was expected.”

“The first half of 2012 will be challenging,” Doshi predicted. “The dust needs to settle on the Euro Zone debt crisis and more importantly, we need to watch the Chinese demand for jewelry. Overall, we expect the second half of 2012 to be brighter, led by a recovery in demand from the U.S. and more economic stability elsewhere.”

The Marketplace

  • India imposed a new 2 percent tax on polished diamond imports in January 2012, which is expected to increase domestic market prices by the same amount.

  • The volatile exchange rate has hampered growth in the domestic market and exports.

  • The overall approach is cautious because the market expects further declines in the prices of rough and polished diamonds.

  • Manufacturing units in Surat are still not at routine production levels or full capacity. 

  • Demand is good for inexpensive piqué and SI diamonds.

Article from the Rapaport Magazine - February 2012. To subscribe click here.

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