The Hindu Business Line : Jewellery firms eye Japan

The US continues to be the world's largest market for jewellery, accounting for 31 per cent of global jewellery sales in 2005. But the stagnating market in the US has altered the geographic distribution of jewellery consumption.

With the possibility of the end of the US Generalised System of Preferences (GSP), the Indian gem and jewellery industry will have to look for other destinations. .

"The Gems and Jewellery Export Council (GJEPC) is reportedly looking at reviving the Japanese market and strengthening trade ties with the Commonwealth of Independent States nations so as to reduce the dependence on the US market," said a recent RBI bulletin.

Japanese markets are for high-end products and catering to these markets will mean upgradation of our products, said Mr Arvind Pradhan, Executive Director of GJEPC.

Consequently, skill in branding and marketing jewellery would be of utmost importance for these retailers to give a competitive edge to their products over other luxury goods in these markets.

Once Indian gem and jewellery products were accepted in the quality conscious Japanese market, it would give a boost to the image of Indian jewellery globally, added Mr Pradhan.

Asian markets such as China and West Asia are other alternative destinations on the map for the industry.

A programme for marketing and promoting jewellery in Japan has been worked out by GJEPC as part of the Indo-Japanese friendship programme for 2007. As a part of this programme, Taj Enterprises, a Japanese agency, has made a selection of products from eight Indian jewellery companies which will be promoted and marketed for a period of one year through 50 exhibitions across Japan as a part of the Indo-Japan Trade Fair.

A KPMG report says that with the end of GSP, the possible outcome for the Indian jewellery industry will not only mean an import tariff of 6.5 per cent, but also competition from China which is not in the list of countries where GSP might be withdrawn.

Jewellery exports from India were worth $4 billion in 2005; of this, more than 30 per cent were to the US.

However extension of the preference will give a 6 per cent duty benefit to India; whereas exports are taxed in Bangkok, Thailand and China, said Mr Mehul Choksi, Chairman, Gitanjali Group.