The Hindu Business Line : `Lacklustre' export show by gem and jewellery sector

New Delhi April 29 Faced with increasing threat from luxury goods and changing consumer habits, export of gems and jewellery items from the country was marginally up at $17.1 billion in fiscal 2006-07, as compared to $16.6 billion during 2005-06. The growth works out to a meagre 2.74 per cent.

Though the full export figures from the DGCI&S for 2006-07 are yet to be made available, the provisional statistics compiled by the Mumbai-based Gem and Jewellery Export Promotion Council (GJEPC) reveal that the overall export of cut and polished diamonds has recorded a decline of close to 8 per cent.

In this category exports from domestic tariff area and SEZs together at $9.77 billion during 2006-07 have shown a growth of 3.37 per cent, while exports from bonded warehouses at $1.12 billion have registered a decline of 52.42 per cent compared to the corresponding period of the previous year.

The second important component is gold jewellery, which has shown a salutary growth of close to 35 per cent at $5.2 billion over the level of $3.87 billion in 2005-06. Export of coloured gemstones at $246.48 million logged a growth of 6.08 per cent during 2006-07 as compared to $232.35 million in 2005-06.

The Minister of State for Commerce, Mr Jairam Ramesh, told Business Line here that the overall export of gems and jewellery in 2006-07 have been "lacklustre" especially with cut and polished diamonds putting up a "disappointing" show, while exports of coloured gemstones could have been "better".

He said that one of the plausible explanations for this tepid performance, as per industry information, was that consumers the world over now prefer " the i-pod to spending on gold jewellery".

Raw material supply

Stating that he was concerned over the traditional export items' insipid show, Mr Ramesh said that he had been in touch with diamond producing countries such as Botswana, South Africa, Namibia, Angola and Russia in order to ensure security of supply and also to devise long-term contract for value addition in these countries.

As a follow-up of the initiatives he had set in motion last year, Mr Ramesh said that he would be going to the African countries in June and to Russia in July to secure some firm commitments of assured supply of raw material for the indigenous gem and jewellery industry.

Diamond Bourse soon

Mr Ramesh indicated that a Bharat Diamond Bourse was on the anvil in Mumbai near Sahar International Airport with 1.6 million square ft for commercial activities and warehousing of gold and diamond jewellery to be exclusively used by domestic industry.

The idea is to attract investors from Antwerp, Israel and Dubai, the traditional diamond trading centres.

More than exports, studies have revealed that China and India would be the next big markets for gold and diamond jewellery as currently the consumers in these two countries account for 16 per cent and 9 per cent of the jewellery items while the US market is peaking out, Mr Ramesh said.

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