Indian Gold Jewellery Rumbles Globally
By siliconindia   |   Tuesday, 17 January 2012, 01:17 IST
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Indian Gold Jewellery Rumbles Globally
Bangalore: India is the largest market for gold jewellery in the world, representing an astounding 746 tonnes of gold in 2010. Indian gold jewellery, a chief global market is anticipated to have risen 5-7 percent in 2011 and a further 10 to 15 percent growth is estimated to grow this year, as the prices of gold is falling back after recent gains. In a recent report, "Indian Gems and Jewellery market Forecast to 2013" by RNCOS, said thae Indian jewellery and gems have seen massive growth rate in past years and the country enjoys the leading position in global jewelley export. The demand for Indian jewellery registered a drop by 26 percent in the third quarter of 2011 to 125.3 tonnes. According to World Gold Council, strong fluctuation in price and a weaker rupee, led to this situation. Mehul Choksi, Managing Director of jewellery retail giant Gitanjali Gems, expressed his concern that country's slow economic growth can result in lower demand for consumer jewellery. Choksi told Reuters, "For the whole year we will end up with a 5-7% volume growth ... (In 2012) I expect, as the prices of gold come down, it will once again catch up the momentum and will grow in volume by 10-15 percent. " The strong demand for Indian jewellery is expected to boost up the revenues of Gitanjali group by 35 percent in the coming financial year, added Choksi. Retails chains like Gitanjali Groups are tying up with Intalian designers so as to keep the uniqueness in their jewelry intact in order to lure their customers. 75 percent women in India are always craving for unique and new designs, while over 50 percent of gold is bought for wedding purpose in the country. Festive seasons like Diwali and Dhanteras has increased the sales up to 28 percent last year. A sudden increase is noticed in purchasing parity of gold by middle class, which resulted in consumption of growth of gems and jewellery by about 11 percent in the 5 year period preceding 2006-07. Indian market contributes around 80 percent of the total jewelry market including diamonds as well as gemstone studded jewelry. The dollar price has already fallen by about 16 percent from the time of $ 1,900 per ounce on September 5, 2011. Experts feel that, "Gold prices may see a consolidation or correction in the first half of 2012." Gold prices rose marginally by 0.11 percent, to 27,537 per 10 grams in futures trade as speculators created fresh position on the back of a firming trend overseas amid weakness in the rupee. India was a late entrant into the global jewelry market and it has taken the country a few years to incorporate international designs, styles and finishes. With powerful competition in market, the stock performance will depend on how efficiently, in terms of both cost and marketing, companies can cut and polish diamonds and also venture into the lucrative but difficult jewelery industry. The market plays a major role in Indian economy as it is the most important earner at the foreign exchange and accounts around 13 percent of India's total merchandise exports. The skilled and low cost manpower, government support and increasing demand in the market is expected to gush out at a CAGR of around 13 percent during the 2011-2013.

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