Diwali Brings Back Glitters on India’s Jewellery Industry!

111Happy days are here again for India’s jewellery manufacturers and retailers as the yellow metal regained its lost shine with the expected growth in sales during festive season of Diwali.

As Mr. Vipin Mehta, Director (Jewellery) of the World Gold Council (WGC) while analyzing the trends had rightly said recently, “In spite of several ups and downs in demand in recent past, overall demand for gold in India has remained primarily strong over the years. Although, jewellery demand may have gone down by 14% in the first half of 2014 over the same period last year, the sales have remained steady during Akshaya Tritiya and for wedding season. But, we are still expecting a stronger second half as far as jewellery demand is concerned with the onset of festivities.”

Rightly so, according to Diwali and Dhanteras sales figures made available by All India Gems and Jewellery Trade Federation (GJF), jewellery sales have gone up by 15% to 20% this year. Dhanteras, which is associated with Lakshmi – the goddess of wealth, and Diwali, the festival of lights in India, are both believed to be auspicious to buy gold.

Though gold jewellery is still very much in demand, sales of diamond jewellery have shot up manifold in comparison with previous years. Important factor behind this growth is lower gold prices this year. Sentiment is also good because the country has a stable government in the centre; all of these have helped to boost the jewellery sales. India’s authorized channels had already imported USD 3.75 billion worth of gold in September which shows 450% jump from the same period in 2013.

Mr. Haresh Soni, Chairman of the GJF says, “The jewellery sales during this festive season were far better than last year. As a global trend, investors remained on the sideway and the sentiments were low till the end of September but the sales picked up during October due to festive buying. On an average across India, gold jewellery sales grew between the range of 15 and 20%. However, many jewellers in Mumbai have reported 30 to 40% increase in sales on the day of Dhanteras as compared to 2013.”

Sales figures received from Gujarat state are quite noteworthy. Gold loving consumers of the state have purchased about 1 tonne of gold worth INR 270 crore and about 3.5 tonne of silver worth INR 27crore on the auspicious occasion of Dhanteras. Traders from the state claimed that the sales figures were lower in comparison to Pushya Nakshatra but better than Dhanteras of 2013.

Mr. Pankaj Parekh, Vice Chairman of the Gem & Jewellery Export Promotion Council (GJEPC) says, “Gold prices this year were 10% lesser than last year. But in value terms, sales were up 10% that means, volume of gold sold was about 20% more than 2013. Consumers have taken good advantage of the lower price and so their appetite for gold has increased. Sales of diamonds and diamond studded jewellery have also increased because of certification.”

Exports of India’s jewellery (both plain gold and studded) have also showed a significant growth of 36% during September 2014 reaching USD 955.13 million as against USD 699.71 million a year ago. For the first six months of the Indian financial year, cumulative gold jewellery exports stood at USD 4,570.89 million, up from USD 3,623.65 million for the same period a year ago.

So, Diwali has surely brought back glitters on India’s jewellery industry. Of course the major gold buying festivals of the year are over here, sales could continue to be strong thanks to the wedding season that is extended till early next year.

Posted by Suresh Chotai