Gems & Jewellery Industry- A Research Article
Think – traditional Indian woman. It is unlikely that you will miss out on the elaborate jewellery she adorns in her picture in your mind. Jewellery has been a part and parcel of a woman’s life in India. Centuries have come and gone but jewellery, especially gold and silver, have very permanently become a part of India’s culture – little girls seeing their grandmother’s jewellery with their twinkling eyes, dreaming to wear it once they have gracefully transitioned into grown up ladies. No wonder, the Gems and Jewellery Industry in India is one that is very important for the country, not only for its culture but also for its economy.
As per the Confederation of Indian Industry, the Indian Gems and Jewellery Industry is one of the fastest growing industries in India which contributes to earning an appreciable amount of foreign exchange for the country’s treasury every year. The industry covers a wide range of activities within its periphery, from procuring raw material from other countries, the talented artisans and craftsmen of India transforming them into adorable and beautiful hand-crafted pieces to selling the items not only within the country but exporting them to bigger markets abroad as well.
India- a rich land, quite literally
India is a land rich in gemstones and precious metals with significant reserves of gold, diamonds, rubies, emeralds, sapphires and other precious and semi-precious stones. As per the Geological Survey of India, Ministry of Mines, India houses almost 9% of the global gold deposits with most of it concentrated in the Deccan part. Some major states with reserves of precious stones can be seen below:
Jammu and Kashmir
Considered the Brazil of India, has a host of gemstones like rubies and other gemstones like garnet, aquamarine, etc.
The most important diamond producing centre in India
Emeralds, aquamarines and other gemstones
Gold, diamonds, cat’s eye, rubies
Diamonds and Rubies
A host of gemstones including sapphires, rubies, alexandrite, etc.
The Gems and Jewellery Market
As per a report by the National Skill Development Corporation, gold jewellery rules the roost with 80% share in the market. The remaining market share is taken by other jewellery including diamond studded and other gemstones studded jewellery. This portion also includes the demand for platinum which on the face of it seems like very less demanded metal. But compare it to the fact that the platinum’s demand in the World is driven by India and China, as IBEF puts it, and the figure starts to look bigger.
Where the size of the Indian Gems and Jewellery Market was USD 30.1 Billion in 2011, it is expected to become USD 45 Billion by 2015
Why Invest in the Indian Gems and Jewellery Industry?
India offers an attractive investment and business opportunity for big players interested in establishing a strong foothold in the Country. This can be attributed to various factors like the Country’s growing domestic market and especially the growing middle class, the export advantage existing in the industry because of renowned Indian craftsmanship and the FDI Policy and a host of other initiatives undertaken by the Government of India. Not only this, various factors like low cost of production and skilled but low cost craftsmanship, help maintain a healthy competition in the Industry.
The main foreign markets for the industry are Europe, USA, UAE and Hong Kong. Some of the newer markets which are being focused on by the industry players are the Latin America, Russia and Africa.
Government Support for the Indian Gems and Jewellery Industry:
The Indian Government has taken various initiatives to help in the further development of the industry. These can be noted as:
1. The FDI Policy:
a. 100 % FDI in the industry through automatic route in the gems and jewellery sector
b. 74% FDI under automatic route for exploration and mining of diamonds and precious stones.
c. 100% under the automatic route for exploration and mining of gold and silver and minerals other than diamonds and precious stones, metallurgy and processing.
2. The Foreign Trade Policy:
a. Duty Free Import Entitlement of consumables, tools and additional items allowed to extents as specified
b. Duty Free Import Entitlement of commercial samples up to INR 3,00,000
c. Personal Carriage of Gems and Jewellery up to USD 5 Million allowed for holding/ participating in overseas exhibitions
d. Designated Diamond Dollar Accounts for businesses with a track record of import/ export of gems and jewellery and an annual turnover of INR 3,00,00,000
e. An Export Oriented Unit (EOU) in the Gems and Jewellery Sector shall be permitted to:
i. Export for holding/ participating in exhibitions abroad
ii. Personal Carriage of gold/ silver/ platinum jewellery, precious & semi- precious stones, beads and articles
iii. Display/ sell in permitted shops set up abroad
iv. Set up showrooms/ retail outlets at International Airports
Starting your own venture in the Industry:
Clearly, for the kind of benefits and the environment offered by the Company to the Gems & Jewellery Industry in India, doing business in this industry can prove to be very lucrative if done in the right manner. Whether it’s a designer boutique showcasing a line of jewellery you designed or a retailing outlet for jewellery items you purchased from a supplier on wholesale basis.
Steps to start a jewellery business:
2. Get registered with Tax Authorities: Obtain the basic numbers from tax authorities like the PAN, TAN, TIN and the Service Tax Number so that you are able to pay all the necessary taxes.
3. Open a Bank Account: Businesses need to open current accounts with owing to large number of transactions in a day. Having a separate bank account will keep things streamlined.
4. Choose a location: Choose where you want to set up the business. Depending on the alternatives available to you, you could lease, rent or purchase a building.
5. Find a supplier: If you are not designing your own jewellery items, you would want to locate a supplier who will be able to supply good quality items at cheaper prices to you, something which will bring you more profits.
6. Get your stocks insured: As the inventory involved in this business is very expensive, it only makes sense to insure your stocks against theft and other mishaps.
7. Advertising: You would want to make sure you weigh all the advertising alternatives so that your business and products get ample attention from prospective customers.
8. Go Online: Businesses that know how to leverage on the contemporary techniques go farther as opposed to their counterparts. Making yourself available online will go a long way in helping you expand your customer base.
Some important licenses that one should be on a lookout for:1. License by Bureau of Indian Standards (BIS) for use of Standard Mark on the jewellery. (A separate Corporate Hallmarking License is required if operating multi-chain outlets)
2. Registration with BIS recognized Assaying and Hallmarking Centres
3. Certification and grading of cut and polished diamonds of 0.25 Carat and above from authorized laboratories as per the Foreign Trade Policy
4. Import Export Code
5. Registration Cum Membership Certificate from the Gem and Jewellery Export Promotion Council (GJEPC)6. Approval of the GJEPC for exporting gold/ silver/ platinum jewellery for exhibitions abroad or export of branded jewellery for display and sale in permitted shops set up abroad
7. Kimberly certificate from GJEPC for foreign trade of rough diamonds
The Indian Gems and Jewellery Industry is one of the most competitive in the world and shall continue to remain so as long as people continue to focus on their appearances, trends and fashion. As changing of such a scenario is highly unlikely, it will be safe to assume that business activities in the Gems and Jewellery sector in India will only be on a rise.