The appetite for gold ornaments will remain undiminished in India in spite of any hike in import duty since there is no comparable investment that offers social security as gold does, according to K. Srinivasan, Managing Director, Jewel One, Coimbatore, a jewellery retailer.
The company, which opened its third retail outlet at Karur on Thursday, will open the fourth showroom in Coimbatore on Jan 23 and is on course to have 10-12 showrooms at the end of the current fiscal, he said.
Speaking to Business Line, he said the argument of the Government that gold imports were impacting the balance of payment position might sound valid. But instead of targeting gold imports, the government should look at other opportunities for revenue generation like increasing exports. He felt that hiking the duty on gold imports might not have the expected impact of curtailing demand since gold is perceived to be an investment in social security.
Srinivasan, who is also the Managing Director of Emerald Jewel Industry India Ltd, which is into manufacturing and export of gold ornaments, wondered how the appetite for gold could be curtailed in the absence of any other comparable investment tools.
Referring to the market rumours that the Government may hike the import duty on gold to 6 per cent (at present it is 4 per cent), he said the gold price witnessed daily fluctuation of 5-10 per cent which did not deter people from purchasing gold ornaments. Any marginal increase in duty rate would not have any impact on purchase decisions of people.
Speaking about the roll out of retail outlets of Jewel One in the current fiscal, he said after opening the Puducherry and Kallakurichi outlets, the company opened its third outlet in Karur today and the fourth would be opened in Coimbatore on Jan 23 on Cross Cut Road and he would have about 10-12 retail showrooms by the end of March this year.
Asked whether the rising price of gold was having any impact on the retail roll out plans of Jewel One, Srinivasan said his retail stores, based on profit sharing model, were not large format stores. He said his expectations were small and pricing was immaterial to the patrons who supported the format since quality and design were the focus areas for Jewel One.