Rapaport Magazine


By Zainab Morbiwala
Looking Beyond the U.S.

With demand for polished showing no signs of picking up, India’s gem and jewelry industry is continuing to experience slow times. While the JCK Las Vegas show did not produce the desired boost to sales, Indian diamond manufacturers are turning their eyes with a hopeful glance to the India International Jewellery Show (IIJS).

Las Vegas Show
   According to Vipul Shah, chairman, Gem and Jewellery Export Promotion Council (GJEPC), the JCK Las Vegas show failed to generate any positive development. Speaking exclusively with Rapaport Magazine, he elaborated, “We were expecting the demand to pick up after the Las Vegas show, but unfortunately, there seem to be no signs of improvement.”
   One member of the industry, who wanted to remain anonymous, shared a more upbeat perspective: “As far as demand is concerned, the Vegas show may not have yielded enough, but then this is the only show where we get a chance to meet with our business associates in the U.S. It is an extremely important event for us. Unlike the Hong Kong show, where on-the-spot transactions take place, the Vegas show is more of an opportunity to meet with prospective buyers and understand their demands. This helps us to strategize our business as per their requirements and plan for the year ahead. We had positive feedback from those we met at the Vegas show and we look forward to the next show. We have started preparing for the IIJS and the Hong Kong show.”

Market Dynamics
   While the weakening of the rupee has not yet caused the industry to push the panic button, Shah admitted the entire industry has its “fingers crossed for demand to pick up post IIJS.” Continued Shah, “We are looking forward to IIJS, where manufacturers from India will have a direct opportunity to meet buyers from within the country as well as from across the globe.” Furthermore, GJEPC will “undertake the initiative to promote upcoming designers and diamond jewelry from India.”
   According to Shah, the only way demand can pick up is when the industry as a whole comes together and develops generic marketing to promote diamonds. “If generic marketing is not being undertaken, then it will only create more obstacles for the industry in coming months. We strongly need to create demand. We are all highly dependent on the U.S., as a good amount of demand is being seen only there. China and India are slow and Europe has its own set of problems with the economy. Relying on just one country is not good for the industry. All the stakeholders have to come together and engage in a collaborative marketing initiative to create and generate demand. What worries me is that in spite of production being low in May, there is no correction in sales. This is a matter of concern,” he emphasized.
   In an exclusive interview with Rapaport Magazine, Mehul Choksi, chairman, Gitanjali Group, offered his assessment of the weak market condition: “Everybody is in a destocking mood and the current situation is being compared to 2008. This destocking phenomenon has to end. Overall, I do not see market conditions improving for at least another year, maybe even after October 2016.”

GJEPC and Industry Groups
   As Indian gem and jewelry companies struggle with the market slowdown, industry groups are working to ensure that they have a strong representation to voice their issues and concerns before the government. In May of this year, GJEPC proposed dissolving individual regional committees and forming a new committee consisting of four states — Gujarat, Maharashtra, Goa and Madhya Pradesh. However, that proposal brought a strong response from the Surat Diamond Association (SDA), which insists on maintaining its independent status. SDA President Dinesh Navadia minced no words when he shared, “We were and are opposed to any such merger.” Surat is the world’s largest diamond cutting and polishing center and the SDA has been in existence for the past 27 years. According to Navadia, the merger would mean that Gujarat would not have the impact it currently has as an individual body. Elaborating further, Navadia said that regional committees are in a better position to pinpoint any issue and challenges before the government. Acknowledging Navadia’s concerns, Shah issued a press release stating, “The Gujarat regional committee will stay and the decision to form a western regional committee has been put off.”
   Unlike the SDA, the Indian Bullion and Jewellers Association (IBJA) urged its members to join the GJEPC. The IBJA is concerned that GJEPC has allotted only three seats to the gold jewelry industry. Sharing his view, Shah noted, “IBJA itself is a very strong body and they can well represent themselves to the government. GJEPC represents all the segments within the industry, whereas IBJA represents the bullion and gold segment, so they are a better body to represent its issues. However, as far as GJEPC is concerned, we have never neglected any issues related to gold. If IBJA feels that their issues are not represented well by the council, they are more than welcome to become members, as the council is open for every segment without any bias.”

Article from the Rapaport Magazine - July 2015. To subscribe click here.

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