In an interaction with ET Digital, Shah says he is upbeat about the prospects of the gems & jewellery sector as the industry expects the ongoing festive month to give a sharp surge in demand. The industry also sees several strong indications to support this expectation of high demand in this festive season.
Edited excerpts:
Economic Times (ET): How do you see the financial year 2023-24 turning out for the gems & jewellery sector amid the ongoing global slowdown, US-China tensions, Russia-Ukraine war, and Israel-Hamas conflict?
Vipul Shah (VS): The year is proving to be challenging for the gems and jewellery sector. Reduced demand in key export markets has had a significant impact on the industry. The US market is grappling with various macroeconomic issues, including rising inflation and high interest rates, which have created headwinds for the sector. Meanwhile, expectations of a post-Covid consumption rebound in China have not materialised due to the country’s own economic challenges, leading to a decline in jewellery demand.
From April to September, there has been a notable 25.76% decrease in the gross exports of gems & jewellery, which now stands at $15,231.27 million, in contrast to $20,515.47 million in the year-ago period. Looking at 2023-24, we anticipate a decline of 20% to 25% in gems and jewellery exports.
ET: How have exports of polished diamonds fared so far in FY24?
VS: The overall gross exports of cut & polished diamonds from April to September 2023 witnessed a decline of 28.76% to $8,702.23 million as compared to $1,2215.47 million for the year-ago period.ET: How do you think e-commerce can help India’s gems & jewellery sector grow?
VS: The government has introduced measures to facilitate ease of doing business in the e-commerce sector for retail exports of jewellery from the country. This presents a significant and promising opportunity, especially considering the post-Covid situation where global buyers increasingly rely on e-commerce and social media platforms to discover products at competitive prices from sellers worldwide. The government’s simplified regulatory measures have enabled Indian sellers to seamlessly deliver their products to global buyers, and these efforts continue to further streamline the process.
Vipul Shah, Chairman, GJEPC
Furthermore, the GJEPC has collaborated with eBay, providing our council members with initial fee waivers, and offering training to help our members use e-commerce to its fullest potential for the sector’s benefit.
ET: Do you think India has done enough in terms of design innovations in the gems & jewellery sector?
VS: India has a rich tradition in the gems and jewellery sector, and it has made significant strides in design innovations over the years. Indian jewellery designers have successfully blended traditional designs with modern and contemporary elements. This fusion of styles has resonated with both domestic and international customers. Jewellery designers and manufacturers in India have embraced new technologies and techniques for design and production. This includes 3D printing, CAD/CAM (computer-aided design/computer-aided manufacturing), and laser cutting, which have allowed for intricate and precise designs.
India has institutions and universities dedicated to jewellery-design education. These institutions are nurturing a new generation of designers and innovators to contribute to the industry’s growth. The GJEPC has set up the Indian Institute of Gems & Jewellery (IIGJ), offering jewellery designing and manufacturing courses, in several cities.
The GJEPC also spearheads several design-driven initiatives like the Design Inspirations trend-forecasting conference, jewellery workshops featuring thought leaders, trend books, and conducts its prestigious annual jewellery design awards called the Artisan Awards. The artisan provides a platform for jewellery designers to push their creativity and design aesthetics to showcase world-class pieces. Over the years, the Artisan Awards has been attracting a lot of entries not just from India, but all parts of the world – thus establishing India’s coveted leadership position in the jewellery industry.
ET: What’s the future for lab-grown diamonds? How are they shaping India’s diamond market?
VS: Indian consumers have always been investment conscious. Their preference lies in investing in gold and natural diamonds, as the value of these assets has consistently appreciated over time.
However, when it comes to lab-grown diamonds, a noticeable trend has emerged. The value of these diamonds has seen a depreciation due to the increasing supply, causing consumers to be skeptical about purchasing lab-grown diamond (LGD) jewellery for investment purposes.
Nonetheless, lab-grown diamonds have successfully established a niche for themselves in the market. They cater to consumers who desire the brilliance and allure of diamonds at more affordable price points.
ET: What are the GJEPC’s expectations from the festive season?
VS: The expectations are high as the Indian gems and jewellery segment’s demand remains relatively resilient to global economic factors. We anticipate a notable surge in demand during the upcoming festive season, and there are strong indications to support this expectation. The August 2023 IIJS Premiere show, organised by the GJEPC, boasted impressive business transactions of Rs 70,000 crore ($8.4 billion), providing ample reason to be optimistic. Retailers across India are experiencing increased demand with the festive season around and it is estimated that there would be more than 35 lakh weddings in the coming few months. All signs point to a robust and promising season for jewellery retailers in India.
