India
Creating New Alliances
By Zainab Morbiwala
The second edition of the Indo-Russian Jewelry Summit, held in Mumbai October 29 to 30, attracted more participants and generated more interest from both countries than the inaugural summit a year ago. The response was so positive that Vipul Shah, the recently elected chairman of the Gem and Jewellery Export Promotion Council (GJEPC), told Rapaport Magazine he plans to schedule more individual summits
with other countries to help build strong and positive business and
personal relationships. The summits are designed to open new finished jewelry markets for India with trading partners who are used to dealing with the country as a supply hub. They have reportedly been successful in increasing trade with the invited country delegations. In the most recent instance, two days of meetings were followed by two days spent touring factories and seeing firsthand the manufacturing capabilities.
At the same time, GJEPC plans to continue its participation at
trade shows and other exhibitions. Next on GJEPC’s schedule are
the Dhaka Show in Bangladesh in early 2013 in association with The Federation of Indian Chambers of Commerce and Industry (FICCI)
and the Karachi Show in Pakistan. The Indian contingent consisted of Gitanjali Gems Limited, Goldiam International Limited, Asian Star Jewels, K.P. Sanghvi International. Gold Star Jewellery, Core Jewellery, H. K. Designs, Inter Gold, KBS Designs, Shrenuj, Uni-Design Jewellery, Patdiam Jewellery, Intergold Jewellery and Indi Gold Jewellery. “I feel that the format of the summit is very unique and very different from the trade exhibitions,” said Irina Litvinova from the Moscow Diamond Bourse. “Unlike the exhibitions, this summit is not at all hectic and we were able to do business in a quiet environment. We were able to speak to all the right people.”
As for the diamond industry, the issue of instability in supply and demand remains a concern. If the widespread optimism in the country is to be believed, 2013 could well be a positive year for everyone. As the industry eagerly awaited the year-end buying season, it received an early holiday gift when prices of polished fell by almost 2 percent. Early indications were that demand going into the holidays was sluggish from both the New York and other U.S. markets. There is also concern about the drop in Hong Kong’s polished imports. Estimates are that approximately 21 percent of India’s cut and polished diamonds are exported to Hong Kong but recently there has been decline in demand.
The third quarter of 2012 saw demand drop by a significant 14 percent. Hong Kong imports roughly $16 billion worth of polished diamonds
per year, 80 percent of which comes from India. In another indication
of the importance of the Hong Kong market to Indian companies, almost 80 percent of the 350 trading offices in Hong Kong are owned by Indians. Shah told Rapaport Magazine that he envisioned a 15 percent to
20 percent growth in exports from India in 2013. “We all know that the first six months of 2012 were extremely slow,” he acknowledged. “But, thankfully, the market has stabilized now. In the coming years, the supply of rough is always going to pose a big problem so it is important that we devise new means of maintaining and increasing our share of exports for the gems and jewelry sector. One obvious way to do this is to position India as a jewelry designing hub, especially since we have all the raw materials we need to produce world-class jewelry and we also are developing a lot of new talent in the field of jewelry design.” At present, India’s share of the market for jewelry studded with gemstones and diamonds is just 7 percent to 8 percent so it is clear that there is a lot of potential to be unleashed. As the industry closes out a year of volatile gold prices, it was grateful for the price stability of gold that prevailed in November. The value of India’s domestic third-quarter 2012 gold demand was $11.8 billion, an increase of 27 percent in comparison to the third quarter of 2011. In 2012’s third quarter, gold demand totaled 223.1 tons, up 9 percent year on year from 204.8 tons in 2011’s third quarter.
Jewelry demand increased 7 percent year on year to 135.1 tons from 126.8 tons in the third quarter of 2011 and investment demand rose by
12 percent to 87 tons. Marcus Grubb, managing director of investment
for the World Gold Council (WGC), said, “After a slow start to the first half of 2012, the third quarter witnessed a gradual pickup in gold demand in India in advance of the festive and wedding season that occurs in the fourth quarter. Against the backdrop of a slowing economy and persistent inflation, this upward trend, encouraged by India’s sociocultural affinity for gold plus the metal’s significance as a store of wealth, is likely to continue through the end of 2012.”Article from the Rapaport Magazine - December 2012. To subscribe click here.
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