New Delhi: India’s Minister of Commerce & Industry and Railways, Mr. Piyush Goyal inaugurated the 3rd India Gold and Jewellery Summit (IGJS) 2019 in Delhi on 22nd November, assuring members of the industry from different parts of the country who had gathered for the two-day event, that the government will lend its full support to them to enable the industry to flourish, while also calling on them to strive for greater self-regulation and complete transparency.
Also present on the dais at the inaugural session of the Summit were Ms Rupa Dutta, Economic Advisor, Dept of Commerce; Mr. Pramod Kumar Agrawal, Chairman GJEPC; Mr. P R Somasundaram, MD, World Gold Council; Mr. K Srinivasan, Convener Gold Jewellery Panel, GJEPC; and Mr. Ashok Seth, GJEPC Regional Chairman, Northern region.
Congratulating The Gem & Jewellery Export Promotion Council (GJEPC) for organising a forum to deliberate on the challenges faced by the industry and discuss the multifarious opportunities lying ahead, the minister said, “I have no doubt that the US$40 billion export industry, which contributes 12 per cent to our export basket, can grow and achieve a lot more.”
He gave assurances that the government would reduce taxes and bring in more finance and measures to support the industry, adding, “If you work with a spirit of transparency, and be the epitome of honesty, it will empower me and the government to take such steps. The sky is the limit if we are seen as a fully transparent and trustworthy country.”
The minister also urged the GJEPC and other industry bodies to put forward concrete suggestions for a draft mining policy on gemstones and precious metals, promising that the government would consider the inputs favourably.
Pramod Kumar Agrawal welcomed the guests and thanked Mr. Goyal for the support the industry has received with several trade-friendly announcements being made under his leadership as the Minister of Commerce & Industry.
Agrawal briefly outlined various positive policy measures taken by the present government during the last few months, including changes in the IGST and GST system and rates, the introduction of a distinct HS Code for lab-grown/synthetic diamonds, and changes to the Duty Drawback, Replenishment and ECGC schemes, among others.
“Our vision is to take the exports to US$ 75 billion and create 2 million additional jobs in the sector by 2025,” Agrawal said, pointing out that the Council has already taken a number of initiatives with the support of the Ministry of Commerce and Industry to achieve this goal.
“We also need your support in terms of policy reforms to make this industry more competitive in the world market,” he concluded, mentioning the need for a Mining Policy for gemstones and precious metal sectors, and Indian Good Delivery Standard for gold refineries, reduction in import duties, revamp of the SEZ policy as some of the key areas of concern.
Rupa Dutta stressed that the Government of India and GJEPC together have taken several measures for ease of doing business and enhance the gems and jewellery industry like bringing down GST, exemption from GST for gems and jewellery ferried for international exhibitions, setting up of common facility centres to boost the jewellery. MSME manufacturing, jewellery parks which could create more jobs, etc.
The summit was divided into a number of sessions with presentations and panel discussions on gold policy, demand and supply scenario, bullion banking and improving the risk profile of the jewellery industry for ease of financing, creating successful brands, integrating old processes with new technology to drive jewellery exports and attract millennials, among others.
The first session was on the demand supply scenario. During this session, HJS Pasricha, Deputy DG, Hallmarking, BIS (Bureau of Indian Standards), stressed that hallmarking was all about building trust through standardisation in both bullion refineries and jewellery. He also said that it was promising that there was growth in the number of jewellers registering to have their products hallmarked.
The panel discussion that followed was moderated by Manisha Gupta, Editor, Commodities and Currencies, CNBC TV18. Pasricha clarified that the jewellery that people had at home did not come under the scope of any hallmarking requirements unless it was to be sold. Jewellers would also be given time to exhaust their old stock before hallmarking became mandatory, he added.
Surendra Mehta, National Secretary, India Bullion and Jewellers Association (IBJA), threw light on demand: ”Future demand this year will still be down by 15-20 per cent, but next year, we expect demand to be the same as in 2018.“ Surendra Pal Singh, Joint Secretary, Department of Economic Affairs, said that in the overall scenario, ”India is a robust gold market with a good future.”
Chirag Sheth, Senior Research Consultant: South Asia and South-East Asia, Metals Focus, said, ‘There is a large youth audience and there are lessons to be learnt from China in tapping this audience – they have employed product innovation to reach out to the young consumer.’
James Jose from the Cochin Refinery spoke about the need for digital hallmarking and a gold spot exchange.
In a session on India’s gold policy, Somasundaram stressed on the need for industry to get together, and pointed out that many of the 80-odd recommendations made in the ‘Transforming India’s Gold Market’ report by the NITI Aayog, could be implemented simply by consensus within the industry, and did not require laws to be formulated. Other panellists included Rupa Dutta, KV Tirumala, Deputy Director General of Foreign Trade, and Prakash Chandra Pincha, Chairman, Eastern Region, GJEPC, representing the trade. The discussion was moderated by Rajesh Khosla, Chairman Emeritus, MMTC-PAMP.
Khosla remarked that the gold policy must be integrated with the economy of India. “We are the largest above ground gold mine in the world – with almost 25,000 tons of gold held privately. There have been attempts to utilise this through gold monetisation schemes… For the industry, the need is to consider, within limitations, what is best for India and then to consider what is best for us”.
Dutta said that the Department of Economic Affairs (DoEA) was working on a comprehensive gold policy and had instituted schemes for gold monetisation. “We import 800-900 tons a year, but to bring out the 25,000 tons of privately held gold, we need to build a comprehensive environment with hallmarking, assaying centres, etc. You will see some positive actions soon, but we also need more cooperation in practice,” she said.
The discussion ended with the panellists calling for greater introspection and positive action by the trade before seeking policy measures from the government.
The panel discussion on building brands was moderated by Anil Prabhakar, CEO, 4 AAy’s Consulting. The panellists included Amit Chaloo, an advisor to international brands; Sachin Jain, MD, Forevermark; Tawhid Abdullah, CEO, Jawhara Jewellery LLC, Dubai; Chandu Siroya, MD, Siroya Jewellers LLC, Dubai; Saurabh Gadgil, Chairman and MD, PNG Jewellers Pvt. Ltd; Prof. Ruppal Walia Sharma, Professor – Marketing and Head, Delhi centre, SPJIMR; and Shaankar Sen, Vice Chairman, GJC (All India Gem & Jewellery Domestic Council).
Chaloo spoke about how successful brands tell their own different stories in unique ways in order to build brands. Jain spoke about using technology to retail and create a unique experiential digital space to engage young customers. He emphasized that the millennial customer is both less brand-loyal and less category-loyal, and so retailers would have to use gamification and storytelling tools, like touch screens, to reach out to new customers.
Prof. Sharma spoke about brand purpose, and how customers were looking for a deeper meaning in what brands stand for. ”People buy you not for what you do but for why you do it,” she said.
Gadgil spoke about his company’s TVC on platinum men’s jewellery in which that he has appeared in, saying, ”If you believe in it, why not wear it? Platinum is cheaper than gold and has a lot of untapped potential.”
Siroya and Abdullah spoke about how Dubai became a collective brand for quality jewellery in response to a slump, when the trade came together to promote themselves as a destination. Sen spoke unscrupulous practices in the trade, pointing out that it was for businesses to choose not to work with tainted associates. He said that trade bodies can only raise flags and act as whistleblowers.
The panel discussion on financing the gold jewellery sector and bullion banking was moderated by Manisha Gupta. The eminent panellists were PN Prasad, DMD, Precious Metal, SBI; Nirakar Chand, CEO, DIL; Harish Madaan, Head of Treasury, ICBC; Manish Padhye, Deputy GM, ICICI Bank; Vipin Raina, President-Marketing, MMTC-PAMP; and Sabyasachi Ray, Executive Director, GJEPC.
Prasad lauded the creation of MyKYCBank. On gold metal loans, he said that there was a need for a framework for bullion banking in India. ”We need one single regulator for bullion banking. Also, the products being offered are very primitive – a wider range of products is required,” he said. Ray mentioned that there were regulatory barriers to advancing such loans to the gems and jewellery sector.
Chand made the point that gold or metal loans were better than cash loans because “they are a natural hedge against price rise, and the cost of financing is much lower than rupee cost of financing. We must encourage such loans. Unfortunately, the RBI’s stance on metal loans has been very restrictive.”
Prasad noted that a standalone bullion bank would not be a feasible idea as the costs are too prohibitive. Instead, banks could have a separate vertical dedicated to bullion banking with new gold products on offer. Such banks could be a best bet for the Indian market as the country is the second largest consumer of gold, yet “it is not a price maker, but price taker.” Raina stressed on the need of having a single trading platform to dictate uniform gold pricing.
Prasad commented that bullion should be viewed as an asset class. He commended the industry and said it was indeed getting professionalised gradually: “I would say, at least 90 per cent of the companies were today LLPs or corporates. On the parameter of transparency, as well, the industry has transformed for the better. But more needs to be done to make this industry professional.”
Padhye also agreed by saying, “Bullion banking is the need of the hour, but more innovation is required.” Raina stressed that ”the market has to open up. There has to be a level playing field – the regulators have to be more openminded.”
The session ended with a consensus that there was a need for a streamlined regulatory mechanism and more innovation in products for bullion banking to come into its own.
The last panel discussion of the summit was on innovation and technology. On the panel were Tanmay Shah, head of innovations, Imaginarium; David Bertazzo of SISMA, Italy; Prof. Smrutiranjan Parida from IIT Bombay; and Alparslan Misir of Alpress Design Moulding and Consulting, Turkey. The discussion was moderated by Shimul Vyas, design professor from National Institute of Design (NID), Ahmedabad.
Tanmay set the tone by underscoring that technology can be used to put the customer first, rather than last, in the process of creating a piece of jewellery. “The consumer, the designer, the manufacturer and the retailer are the four stakeholders in the creation of jewellery. In the old structure, the consumer came last, when the piece had already been made. Today, however, consumers are emphatically telling you their demands before the piece has been created. They don’t care about what it’s made of or how unique the process is. They want exclusivity, and hence we need unique platforms for storytelling,” he said. He spoke about virtual catalogues and technology like 3D printing giving forms to designs that were not possible earlier.
David Bertazzo of SISMA, Italy, explained how Italy is now driving innovation in modern methods of jewellery manufacturing. “We introduced lasers to the industry, and the last development we have been responsible for is additives. Now, it’s important to develop newer technology.” Alparslan Misir of Alpress Design Moulding and Consulting, Turkey, spoke about their work in moulds, lasers and fusion technology – casting, stamping, laser and hollow.
Metallurgy expert Prof. Smrutiranjan Parida spoke about the role metallurgy and inventions like nano gold can play in creating the jewellery of the future. He also presented the possibilities of metal alloys and metal recycling.
