|Indian jewellery industry has been passing through a ‘transit period’ and is re-adjusting itself with the changed circumstances now ever since the government has imposed curbs on imports of gold to control the country’s ever increasing the Current Account Deficit (CAD). Domestic jewellery consumption as well as exports have come down drastically thanks to these restrictive measures and as a result the manufacturers and traders have been exploring some alternative market centres to maintain their graphs of progress.
|One such centre is Dubai whereon Indian jewelers are concentrating because of the favorable government policies, zero taxation, low import duty, minimal market regulation and strict check on quality. A tower-high import tax (10%) on the gold and rising premiums demanded by sellers in India are blocking bullion supplies and that have compelled Indian jewellers to step up imports of finished gold jewellery from Dubai and Singapore.
The option of finished jewellery imports has become viable which according to jewelers here could even reshape the domestic jewellery industry. A 10-gram gold chain from Dubai costs 27,000 INR ($430) which is about 10% lower than the cost in India. The cheaper price is even after adding a 15% duty that finished jewellery imports attract, say jewelers here. As a result, jewellery imports from Dubai have increased nearly four times to 4-5 tonnes in January from 1.0-1.5 tonnes two months prior to that, according to figures provided by the All India Gems and Jewellery Trade Federation (GJF).
|Some of the leading Indian jewelers like Gitanjali Exports and Kalyan Jewellers are also planning to raise their capacities at their overseas manufacturing units as it fits well with their costing.
On the other hand, gold jewellery prices in the UAE have dropped by 2% during last two months with Indian-made sets becoming more freely available in the local trade. In some cases, jewellery imported from India is being sold there without even adding making charges which makes the Indian jewellery competitively priced to what is being made in UAE, the industry sources say. The increased volume of Indian-made jewellery into the UAE comes after India imposed strict requirements that the country’s traders should export 20% of their local bullion offtake.
|India’s Gem & Jewellery Export Promotion Council (GJEPC) has also become aggressive to exploit the potentials of the Dubai & UAE markets by recently launching the Global Gem & Jewellery Fair (GGJF) in Dubai for the first time at Atlantis, The Palm, from 20th to 22nd March, 2014 in cooperation with DMCC. At the show’s inaugural function Mr. Pankaj Parekh, Vice-Chairman, GJEPC said, “India’s prime role as the sourcing centre for diamonds and precious stones jewellery is renowned globally. Traders and visitors from across the world to India have appreciated the country’s craftsmanship, quality, design and cost efficiency. Now it’s time for us to return the gesture and bring the source to Dubai – the most promising destination for the gemstones and jewellery trade in recent times”.
|So, the UAE today has become the top destination for gems and jewellery for India, with volumes totaling $14.37 billion (Dh52.7 billion) last year, and was followed by Hong Kong ($9.86 billion) and the US ($4.79 billion), according to an Indian industry grouping which is mounting a business-to-business trade show in Dubai.Posted by Suresh Chotai
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