India’s gem & jewellery sector
has achieved not-so-encouraging export figures during 2011-12. The apex body Gem & Jewellery Export Promotion Council (GJEPC) has announced performance of the sector last week at a press conference held in Mumbai.
According to figures provided by the GJEPC, India’s G&J sector
has witnessed a narrow decline of .36% during 2011-12 due to the decrease in trading exports of diamonds. Sector’s total exports were recorded at USD 42839 million (Rs. 204823 crore) during 2011-12 as against USD 42995 million (Rs. 195735 crore) during 2010-11. Although there is a marginal decline of .36% in dollar terms but it has achieved an increase of 4.6% in Rupee terms.
It should be noted here that the Gem & Jewellery sector
accounted for 14% of India’s total merchandise exports in FY 2011-2012.
The growth in the sector was primarily driven by Gold Jewellery
which registered an increase of 30% in during 2012. The exports grew from USD 12695 million (Rs. 57747.67 crore) in 2010-2011 to USD 16517 million (Rs. 79430.26 crore) in 2011-2012.
Cut and Polished Diamonds (CPD) witnessed a decline of 17.3% with exports decreasing from USD 28217 million in 2010-2011 to USD 23329 million in 2011-2012.
Coloured Gemstone exports witnessed an increase of 9.10% in dollar terms with sector recording growth from USD 314.20 million in 2010-2011 to USD 342.80 million in 2011-2012.
UAE was the largest exporting destination with 44% of Exports to the market, followed by Hong Kong with 25% and USA with 12% of exports.
Mr. Rajiv Jain, Chairman of the GJEPC while commenting on the figures said, "We are happy that keeping with the govt. objective of reducing the trade deficit, imports of cut and polished diamonds have dipped post the introduction of 2% import duty on cut & polished diamonds in Mid-January 2012. However an increase in import figures of rough diamonds indicates stable growth of trade at the manufacturing level and growth in exports."
There has been a substantial decline in import of polished diamonds during Jan to March 2012 (more than 70% in a month post introduction of 2% duty on C&PD. In the annual figure the decline is 30% in 2011-12 in comparison to previous year. It is expected that the total import of polished diamonds at USD14.3 billion in 2011-12 may eventually come down significantly in 2012-13.
“We can note the trend in the 1st quarter of April-June 2012. This trend is positive and will help achieve higher value addition and maintain trade balance in months to come", he added
There are series of initiatives planned by GJEPC that will provide an impetus to trade and catapult the industry to newer heights.
On the other hand, India’s gold imports could decreas by 38% to 600 tonnes in 2012 while silver imports are likely to go down by 27% this year because of volatile prices, despite import duty remaining unchanged.
Sunil Kashyap, head of Asia at Scotia Mocatta, a unit of Bank of Nova Scotia said, “Investors in India were averse to steep and volatile changes in prices of silver, which could dent imports. Silver imports are likely to fall to 3,500-4,000 tonnes in 2012, down from 4,800 tonnes imported last year.”
India’s Finance Minister Mr. Pranab Mukherjee, in its annual budget in March, has kept the import duty on silver unchanged at 5% on value. The budget has abolished excise duty on silver which is often considered as poor man's gold. But silver prices have risen 112% up to the date since 2009.
The Finance Minister however, has doubled the import tax on gold to 4% of value, which led to a prolonged shutdown by jewelers last month. Jewellers in India have urged the government for a rollback of the duty.
So overall, India’s Gem & Jewellery sector has witnessed many ups and downs with not-so-encouraging results during 2011-12.