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GEMS AND JEWELLERY SECTOR

SUBMITTED BY:

YASHICA ARORA

MEGHA MALHOTRA

RICHA CHABRA

GITIKA SINGH

NUPUR SETHI

GARIMA GUPTA



CHAPTER 1

INTRODUCTION



INTRODUCTION

•

India possesses world's most competitivegems and jeweler market owing to its

low cost of production and availability

of skilled labor.

•Gems and jeweler form an essential

part of the Indian tradition.

•The components of jeweler include traditional gold, diamondand platinum, accompanied by a variety of other precious andsemi-precious stones.



SIZE•Large market for Gems & Jewelry withdomestic sales of over $10 billion.

•4% of the global Gems and Jewelry market .

•Exports of over $15.5 billion; over 18% of

India’s exports.

•India is the largest consumer of gold jewelerin the world.

•India is the largest diamond cutting andpolishing center in the world.

•Third largest consumer of polished diamonds

after USA and Japan.



STRUCTURE

• The Indian Gems & Jewelry industry is highly fragmented with

a large number of domestic private sector companies.

• A large portion of the market is in the unorganized sector .

• India is gaining prominence as an international sourcing

destination for high quality designer jewelry .

• Walmart, JC Penney etc. procure jewelry from India .



INDIA'S POSITION IN GEMS AND JEWELLERY SECTOR

• Gems and Jewelry is one of India 's leading foreign

exchange earning sectors.

•

It accounted for 16.7 per cent of India 's total

Merchandise Exports.

• India Gems & Jewelry exports are expected to

grow at a whopping 15 to 20 per cent in FY 2012.

• At present India exports 95% of the world’s diamonds.



KEY INDUSTRY COMPONENTS

• Diamonds

• Gold

• Precious stones

• Platinum

• Pearl

• Silver





CHAPTER 2

CONCEPT, POLICY AND

LITERATURE REVIEW



POLICY

• 100% FD is permitted in the Gems

& Jewelry sector through the

automatic route.

• SEZs and Gems and Jewelry Parks

have been set up to promote

investments in the sector.



GOVERNMENT REGULATION AND

SUPPORT

• • The Indian gems and jeweler export industry had its modern

beginning in the 1960s, when the Government of India

introduced the Replenishment (REP) licence, allowing an

importer to import rough diamonds worth 80 per cent of the

value of his exports.

• The EXIM Policy for 2002-07 contains a special focus on

exports of gems and jeweler through market access initiative

schemes, duty free imports and appropriate adjustments in

value addition norms.• • The government has set up various special economic zones

(SEZ) for gems and jeweler industry with specific incentives

provided to units in SEZs.



In order to give a boost to exports of gemsand jeweler, Government took major policyinitiatives during 2004-05.

• Lowering import duty on platinum from US$ 12.2 per 10 gms toUS$ 4.64.

• Exempting rough colored precious gems stones from customs duty at the first stage itself instead of claiming reimbursements later.

• Rough semi precious stones are already exempt, aimed to further increase the exports of studded jeweler and platinum jeweler.



FTP PROVISIONS

• Import of gold of 18 carat and above shall be allowed under the

replenishment scheme.

Schemes for Gold / Silver / Platinum Jewelry-

Exporters of gold / silver / platinum jeweler and articles thereof may import

their essential inputs such as gold, silver, platinum, mountings, findings,rough

gems, precious and semi-precious stones,synthetic stones and unprocessed

pearls etc. in accordance with the procedure specified in this behalf.

Replenishment Authorization

Exporters may obtain Replenishment (REP) Authorizations from RA in

accordance with procedure specified in HBP v1.



• Diamond & Jewelry Dollar Accounts-

Firms and companies dealing in purchase / sale of rough or cut and

polished diamonds / precious metal jeweler plain,minakari and / or

studded with / without diamond and / orother stones, with a track

record of at least 3 years inimport or export of diamonds /coloured

gemstones /diamond and coloured gemstones studded jeweler /

plaingold jeweler, and having an average annual turnover of Rs. 5

crore or above during preceding three licensingyears, may also

carry out their business throughdesignated Diamond Dollar Accounts (DDA).



• Duty free re-import entitlement for rejected jeweler shall be 2% of the FOB value

of exports - To promote the G&J exporters, this provision says that if your order is

rejected by foreign buyer you may re-import upto 2% of the FOB value of exports

• Cutting and polishing of gems and jeweler, shall be treated as manufacturing for

the purposes of exemption under Section 10A of the Income Tax Act.

• Duty free import entitlement of consumables for metals other than Gold, Platinum

shall be 2% of FOB value of exports during the previous financial year.

• Duty free import entitlement of commercial samples shall be upto Rs 100,000 -

Samples required for purchase orders can be acquired duty free upto Rs 1 Lac from

foreign suppliers.



GOVERNMENT INITIATIVES

• 100 percent foreign direct investment (FDI)in gems and jeweler throughtheautomatic route is allowed.

• The government has lowered import duty onplatinum and has exempted

rough coloredprecious gems stones from customs duty.

• Rough, semi-precious stones are alsoexempt from import duty

• Setting up of SEZs and gems and jeweler parksto promote investment in thesector.

• The government abolished import duty onpolished diamonds.

• The export of colored gemstones on aconsignment basis has been allowed.



• Duty-free import of consumables for metals otherthan gold and platinum

up to 2 percent of freighton board (f.o.b) value of exports.

• The government has raised the limit value of jeweler parcels for export

through foreign postoffice (including via speed post) from US$ 50,000to

US$ 75,000 and the time period for re-import of branded jeweler

remaining unsold has beenextended from 180 days to 365 days.

• To neutralize duty incidence on gold jeweler exports, it has now been

decidedto allow Duty Drawback on such exports.

• To promote export of Gems & Jewelleryproducts, the value limit of

personalcarriage have been increased from US$ 2million to US$ 5 millionin case of participation in overseas exhibitions.

• In an endeavor to make India adiamond international trading hub, it

isplanned to establish “Diamond Bourse(s)”.



SPECIAL FOCUS INITIATIVS

MDA - To promote export of Gems & Jewelleryproducts, the

13 value limits of personalcarriage have been increased from

$ 2 millionto US$ 5 million in case of participation inoverseas

exhibitions.

Surat in Gujarat have been recognized as Towns of Export

Excellence, for diamonds.



• Gems and jeweler EOUs may source gold /silver /

platinum through nominated agencies on loan / outright

purchase basis. Units obtaining gold/ silver / platinum from nominated agencies, either on loan basis

or outright purchase basis shall export gold / silver /

platinum within 90 days from date of release.



STRATEGIES• Branding of Jewelry

• Hallmarking of jewelry

• Increasing Market Presence of Platinum Jewelry

•

Change in Product Portfolio• Continuous Skill Development

• Technology Up gradation

• Establishing Diamond Bourses

• Increase in Exploration Activities • Enhancing Visibility through Continuous Participation

in International Exhibitions



FUTURE OF THE INDIAN JEWELLERY MARKET

India’s jeweler market is only expected to increase in the future with total

estimated jeweler sales of US$ 21 billion by 2010 and US$ 37 billion by

2015.

Diamond jeweler consumption in India is also estimated to jump by 78 per cent in 2010.

Branded jeweler is likely to be the fastest-growing segment in domestic

sales.

The sector is expected to grow at 40 per cent annually to touch US$ 2.2

billion by 2010.



Indian diamond jeweler industry is the third largest consumer of polished

diamonds after USA and Japan.

The organized gems and jeweler sector is anticipated to grow rapidly in

near future.

Various factors like cheap labor cost, better designs and manufacturing

practices, are making the country an attractive destination for cutting and

polishing of diamonds.



LITERATURE REVIEW• Kishore Sharma (1960) Factors determining India's

export performance

• Rashmi Bang (1997) The Export-diversifying Impact of Japanese and US Foreign Direct Investments in theIndian Manufacturing Sector



MAJOR PLAYERS• Gitanjali Group

• Su-Raj Diamonds & Jewelry Ltd.

• Suashish Diamonds Ltd.

•

Shrenuj & Co. Ltd. • Tanishq

• Hindustan Diamond Co. Pvt. Ltd.

• Vaibhav Gems Ltd.

• Asian Star Co Ltd.

• Rajesh Exports Limited



DATA AND ANALYSIS

CHAPTER 3









CHAPTER 4CONCLUSION AND RECOMMENDATIONS



OPPORTUNITIES FOR THE

SECTOR • Entering New Markets

• Cutting and Polishing of Large-Sized Diamonds

• Value Addition

• Jewelry Retail

• Outsourcing Hub



CHALLENGES• Challenges Unorganized Sector

• Impact of Recession

• Rise in Prices

•

Possible Threats from China and from OtherCountries Producing Diamonds

• Low Level of Technology Absorption

• R&D and Product Development



• Government must liberalize the custom duties andprocedures.

• The government has to encourage the domesticexporters and help them to export their product in

International Market.

• The exporter of Gems and Jewelry must know theprocedures to be followed in the export.

SUGGESTIONS



REFERENCES

• http://www.eximguru.com/exim/dgft/exim-policy/2009-

2014/chapter_4_duty_exemption_remission_schemes.aspx

• http://jeweler.indiabizclub.com/info/gem_and_jewellery_industry_o

verview

• http://www.eximbankindia.com/op/op138.pdf

• http://www.indiainbusiness.nic.in/industry-infrastructure/industrial-

sectors/gems-jeweler.htm

• http://www.ibef.org/industry/gemsjewellery.aspx

http://www.eximguru.com/exim/dgft/exim-policy/2009-2014/chapter_4_duty_exemption_remission_schemes.aspx


http://jewellery.indiabizclub.com/info/gem_and_jewellery_industry_overview


http://www.eximbankindia.com/op/op138.pdf

http://www.indiainbusiness.nic.in/industry-infrastructure/industrial-sectors/gems-jewellery.htm


http://www.ibef.org/industry/gemsjewellery.aspx

http://www.ibef.org/industry/gemsjewellery.aspx








http://www.eximbankindia.com/op/op138.pdf








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