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A
Project Report
On
“A STUDY OF GEMS AND JEWELLERY EXPORT”
At
Gosil Exports Pvt. Ltd.
Submitted in partial fulfillment of the requirements of
Post Graduation Diploma in Management
2008-2010
Ajay Yadav
SUBMITTED TO
SINHGAD INSTITUTE OF MANAGEMENT AND COMPUTER
APPLICATION (SIMCA), PUNE
D E C L A R A T I O N
I, the undersigned, hereby declare that the Project Report entitled “A
Study of Gems and Jewellery Export” written and submitted by me
to the Sinhgad institute of management and computer application
(Pune) in partial fulfillment of the requirements for the award of Post
Graduation diploma in Management under the guidance of Prof.
Kanak Tara is my original work and the conclusions drawn therein are
based on the material collected by myself.
Date: Research Student
Place: Pune Ajay Yadav
2
C E R T I F I C A T E
This is to certify that the Project Report entitled “A Study of Gems and
Jewellery Export“ which is being submitted here with for the award of
the Post Graduation Diploma in Management, Pune is the result of the
original research work completed by Mr. Ajay Yadav. He completed the
work under my supervision and guidance, and to the best of my
knowledge and belief the work embodied in this Project Report has not
formed earlier the basis for the award of any degree or similar title of
this or any other University or examining body.
Dr. Apoorva Palkar Prof. Kanak Tara (Director SIMCA) (Project Guide)
Date :
Place :
3
ACKNOWLEDGEMENT
Words are indeed inadequate to convey my deep sense of gratitude to all those who have helped me in completing this summer project to the best of my ability. Being a part of this project has certainly been a unique and a very productive experience on my part.
I am really thankful to Mr. Kailash Agarwal (Managing Director) for making all kinds of arrangements to carry the project successfully and for guiding and helping me to solve all kinds of quarries regarding the project work. His systematic way of working and incomparable guidance has inspired the pace of the project to a great extent.
I extend my warm thanks to Mr. Prakash Rijhvani (Manager), who guided me with their expert advice, which proved to be worth full for my project without which the project could have not at all been easy.
Last but not least I would like to thank all the employees of Gosil Exports Pvt. Ltd. who have directly or indirectly helped me with their moral support for the completion of my project.
I would also like to thank my course project guide and mentor Prof. Kanak Tara for assigning me a project of such a great learning experience and acquainting me with real life project financing and appraisal.
4
TABLE OF CONTENT
Executive Summary
Chapter ~ 1 Introduction
Gems & Jewellery Sector
Classification
Chapter ~ 2 Objectives of the Study
Chapter ~ 3 Literature Review
Gems & Jewellery Sector in India
Diamond processing
High-end jewellery
Gems and Jewellery/ Background
Structural Characteristics
Market Players in Gems & Jewellery Industry
Diamond
Exports in Gems & Jewellery Industry
Chapter ~ 4 Gosil Exports Pvt. Ltd.
Chapter ~ 5 Research Methodology
Nature of Data
Data Collection
5
Tools of Analysis
Chapter ~ 6 Data Presentation
Present state of the industry:
Diamonds
Future prospective:
Questionnaire Analysis
Chapter ~ 7 Conclusions
Bibliography
Annexure
6
EXECUTIVE SUMMARY
Diamonds, gems and Jewellery have been a part of the Indian civilization since its
recorded history, the significance of the gems and Jewellery industry in the Indian
economic scenario is a development of the last three or four decades. In 1966-67, the
export turnover of the Gems & Jewellery industry was just Rs 220 m representing a 3
per cent of total merchandise exports. However, it has now grown to become one of
the leading export oriented industries in India recording an export turnover of around
Rs 91617.53 Crore during 2008-09, making it a significant foreign exchange earner
for the country.
The gems and jewellery sector, which has seen a substantial fall in exports since 2007
due to the withdrawal of a 6 per cent duty concession under the Generalized System
of Preferences on jewellery exports to the US, has been severely affected by the
economic meltdown.
As a result, India’s share of gems and jewellery exports to the US has come down
from 36 per cent in 2006 to 20 per cent in 2009.
The UAE was the largest importer of gems and jewellery from India in 2008-09, with
a share of 31 per cent. This was followed by Hong Kong with a 25 per cent and the
US with 20 per cent. The gems and jewellery sector accounted for 13 per cent of
India’s total merchandise exports.
7
During April 2009, the total gems and jewellery exports of the country was $1,144
million, as against $1,740 million during the same period last fiscal, a fall of about 34
per cent.
CHAPTER~1
INTRODUCTION
Gems & Jewellery Sector
Diamonds, gems and Jewellery have been a part of the Indian civilisation since its
recorded history, the significance of the gems and Jewellery industry in the Indian
economic scenario is a development of the last three or four decades. In 1966-67, the
export turnover of the Gems & Jewellery industry was just Rs 220 m representing a 3
per cent of total merchandise exports. However, it has now grown to become one of
the leading export oriented industries in India recording an export turnover of around
Rs 875 bn during 2006-07 and contributing 16 per cent of total exports, making it a
significant foreign exchange earner for the country.
Classification:
Gems & Jewellery Sector
8
1. Polished Diamonds: India is one of the best markets in the world in the polished
diamonds for its world-class quality of diamonds as well as exquisite cutting
skills. Over 83 per cent of India's Gems & Jewellery cut and polished diamonds
account for exports. Jaipur and Surat are famous as world class polishing and
designing centers.
2. Gem Stones: This category refers to the stones other than diamonds, these stones
comes under two basic categories that are precious stones and Semi precious
stones. There is a huge demand for these gemstones especially of Sapphire,
Emerald and Ruby. India's exports of gems have crossed 5000000 carats this year.
3. Gold and Jewellery: This category represents the gold and Jewellery, which is
used in the manufacturing of various ornaments. Indian is the country that is the
largest consumer of gold in the world, In the year 2007 gold consumption in India
was 850 tons 33% up from the last year.
4. Synthetic Stones: Synthetic diamond is diamond produced through chemical or
physical processes in a laboratory. Like naturally occurring diamond it is
composed of a three-dimensional carbon crystal. Synthetic diamonds are also
called cultured diamonds. Synthetic diamond is not the same as diamond
9
imitation, which can be made of other material. This is an upcoming market in
India.
10
STATEMENT ABOUT THE PROBLEM
India has been one of the most important countries for the production of Gems And
Jewellery. One of the highlights is the production of Studded Jewllery. Studded
Jewellery trading in India is age old as it is established by the fact that in 1650 A.D.,
sources report the employment of more than 60,000 workers in the Eluru mines,
where they dug and washed the precious stones. Today though India has almost no
raw Studded Jewllery left within her own soil still we produce 70% of the World
gems in terms of quantity and 45% in terms of value. India is the original country
which discovered gems and initiated gem craft. The gems produced here gave birth to
a fabulous industry and global trade.
Indian Gems and Jewellery Industry have achieved a premier position in the
International market. Today India has been recognized as a significant manufacturing
exporting center apart from its traditional strengths in handmade jewellery, the
country has niche for itself in machine made commercial jewellery arena. The export
industry has come of age and is now entering a new phase of development. Gearing
up to achieve further growth, the industry has already captured a 55% share of world
market by the turn of this century.
India is a primary source of imports for the developed countries, mainly because of
abundant availability of skilled and cheap labor, but now this no longer remains the
competitive edge for India as heavy competition is faced by various countries like
China, Thailand and Sri Lanka. But at the same time, India has managed to keep its
position healthy and have brighter prospects ahead.
11
CHAPTER~2
OBJECTIVES OF THE STUDY
To review the present status of the Indian Gems and Jewellery Sector & Analyze
its contribution to the economy.
To critically evaluate the export performance of Indian Gems And Jewellery
sector over the years and its share in the global trade in Gems And Jewellery
To study about the competitive position of Indian Gems and Jewellery export.
To find out who is better potential importers of Indian Gems & Jewellery product.
To analysis the vital steps for improving the Gems & Jewellery export.
To understand the importance and effectiveness of export in present market
situation.
To examine in detail the Europe as a market for Gems And Jewellery and India’s
current performance in the market, with particular focus on Gosil Exports(Jaipur)
12
CHAPTER~3
LITERATURE REVIEW
GEMS & JEWELLERY SECTOR IN INDIA
Gems and jewellery play a significant role in Indian customs and traditions, making
this sector integral to the economy and one of the fastest growing industries in the
country.
Worldwide, the gems and jewellery industry has been growing at a good pace and is
currently estimated at over US$ 130 billion. In India, it accounts for nearly 20 per
cent of total Indian exports. It provides employment to 1.3 million people directly and
indirectly.
Apart form being the world’s largest diamond processing (cutting and polishing)
country with an 80 per cent share in world market India’s favorable trade policies
have made India the hub for gems and jewellery.
Leading Branded jewellery is the new mantra in the market, having rapidly acquired a
niche over the past few years. Increasing purchasing power and disposable incomes of
India’s middle class has resulted in consumption growth of this industry by about 11
per cent in the five-year period preceding 2006-07. Add to that the insatiable Indian
craving for gems and jewellery, and the demand will skyrocket to US$ 20 billion by
2010 and US$ 30 billion in 2015, according to industry experts.
India’s gems and jewellery industry has been allowed 51 per cent foreign direct
investments by the government in single brand retail stores attracting both global and
domestic players to this sector. The burgeoning retail industry in India is instrumental
in innovatively marketing and branding diamonds and traditional jewellery, making
inroads in this sector and contributing to the nation’s economy. According to a report
13
released by Technopak Advisors on Changing Retail Landscape in India, the
jewellery and watches market is pegged at about US$ 13.52 billion. It is expected to
register a 12 per cent growth by 2012, touching US$ 23.54 billion.
India’s economic boom in the country has translated into a large consumer market for
jewellery and other luxury products, offering a lucrative opportunity for major brands
to make their foray into the Indian market and establish their presence. Experts
believe that by 2013, India will become the biggest consumer of jewellery.
The history of the Indian gem and jewellery, a $30-billion industry, began and
flourished in the two leading States of Maharashtra and Gujarat. Exports from the
industry fetched $17.1 billion in 2006-07 against $16.64 billion in 2005-06, showing a
growth of 26 per cent. But in past 1 year we have seen some decline due to recession.
The journey of a diamond is said to begin with mining of roughs followed by sourcing
them by trading firms after which they trade it with the processors who then process
the rough diamonds to manufacture cut and polished diamonds which then end with
the trade of the polished diamonds.
Diamond processing
Today, India houses the worlds’ largest diamond processing (cutting and polishing)
industry with an estimated 1,000,000 processors. India processes over 57 per cent of
the world’s rough diamonds by value. It is said that 11 out of 12 stones (diamonds) set
in jewellery are cut and polished in India. Surat in Gujarat is home to a majority of
these diamond processors. India’s exports of cut and polished diamonds in calendar
year 2008 stood at Rs 48,905.57 crore or 349.389 lakh carats down 9.25 per cent from
Rs 53,892.02 crore or 419.9 lakh carats during same period in 2007.
14
Processing is done on rough diamonds in full range of sizes and qualities, including
stones larger than 10 carats.
Diamond trading hub
After making its mark in the world diamond processing industry, the industry
fraternity has taken up the motto to make ‘India the diamond trading hub’. Thus
Mumbai, the financial capital of the country, is said to be Indian Antwerp in the
making.
The current format of diamond trade has four different types of channels involved in
the sourcing and trading of diamonds namely, centralised distribution, direct selling,
rough trade and brokerage. Bharat Diamond Bourse, a service oriented non-profit
guarantee company, is an 18 lakh sq. ft. complex in Mumbai. It was set up with the
primary objective of establishing necessary infrastructural facilities for promotion of
export of diamonds, including jewellery from India and to make India an international
trading centre. Instituted to cater to all the needs of the diamond trade, the bourse is
anticipated to deal with over 30,000 people a day. The facilities here will include
offices of diamond traders, strong rooms, lockers, customs clearance facilities with all
the modern facilities required to carry day-to-day business.
High-end jewellery
As the gem and jewellery companies are based out of Mumbai, the city is home to
various types of jewellery from the traditional to the high-end designer fashion
jewellery. It is one of the largest producers and exporters of jewellery, which is
estimated to be over $13 billion. Prominently, it accounts for over 15 per cent of the
world jewellery fabrication pie.
15
Not only this, India is one of the fastest growing markets for jewellery, growing at the
rate of 10.20 per cent per annum over the last five years. Today, the Indian consumer
market for jewellery is said to be $13.1 billion, an increase of close to 8 per cent over
the previous year. A study by KPMG says that India is set to realise total jewellery
sales of $21 billion by 2010 and $37 billion by 2015. Currently, out of the eight key
world retail markets, the US is number one accounting for 31 per cent of the jewellery
sales. India and China follow with 8.3 and 8.9 per cent respectively.
According to the KPMG study, India’s growing importance in the global jewellery
market is only expected to increase in the future. The total demand is expected to
reach $18.25 billion in 2010 and to $ 28.28 billion in 2015. Diamond jewellery
consumption in India is estimated to jump by 78 per cent in 2010.
Forecast
India and China together are predicted to emerge as a market equivalent to that of the
US by 2015, according to the KPMG report on the global gems and jewellery industry
– Vision 2015: Transformation for Growth. The industry can see capital infusion of
around $ 10 billion, according to experts.
As per forecasts, by the year 2015, the industry will witness a good fragmentation in
the jewellery retail business while keeping the area of diamond mining, sourcing,
processing within the confines of either niche or mass players.
Mining is at the heart of the gem and jewellery industry as the activity is the only
natural source of raw material for the industry. The Geological Survey of India has
stated that India has a great potential for diamond deposits. Based on this and
independent analyses, some of the diamond exploration companies are making efforts
16
to make India another target destination for diamond exploration. Maharashtra
features on the list of potential states for diamond exploration.
The Gem and Jewellery Export Promotion Council (GJEPC) is primarily involved in
introducing the Indian gem & jewellery products to the international market and
promoting exports. To achieve this, the Council provides market information to its
members regarding foreign trade inquiries, trade and tariff regulations, import duties,
and information about jewellery fairs and exhibitions. It also takes up relevant issues
with government and agencies connected with exports and submit documents for
consideration and inclusion in the EXIM Policy. There are a lot of opportunities from
setting up factories to retailing through showrooms for a prospective investor
Gems and Jewellery/ Background
The two major segments of the gems & jewellery (GJ)
business in India are gold and diamond jewellery. The GJ
industry has an important role in the Indian economy.
While a predominant portion of gold jewellery
manufactured in India is for domestic consumption, a large
portion of rough, uncut diamonds processed in the form of either polished diamonds
or finished diamond jewellery is exported. With an estimated consumption of around
800 tonnes during 2007 (including jewellery consumption), India is the largest
consumer of gold in the world. India is also estimated to hold nearly 14,000 tonnes of
gold, accounting for nearly 9% of the world’s cumulative mine production. Apart
from its historical religious significance, gold is valued as an important savings and
investment vehicle.
17
Gold in Indian families remains the Indian bride’s `Streedhan’, the wealth she takes
with her when she marries and which remains hers. Gold jewellery is the preferred
jewellery worn by women in India irrespective of their religious beliefs. Gold
jewellery is very popular among farmers, with an upsurge in gold sales after a good
agricultural season. Buying of gold is also an important part of every stage of an
Indian citizen’s life—at birth, marriage, construction of home, festivals, religious
ceremonies, setting up of new business, and death.
SIZE
Large market for Gems & Jewellery with domestic sales of over $10 billion
4% of the global Gems and Jewellery market
Exports of over US $15.5 billion; over 18% of India’s exports. According to
recent statistics of the Gems & Jewellery Export Promotion Council (GJEPC),
India's exports of gems & jewellery (GJ) aggregated Rs. 15787.09 Crores
(US$3958.64million) during the month April-May- 08.
India is the largest consumer of gold jewellery in the world
Accounts for about 20% of world consumption
India is the largest diamond cutting and polishing centre in the world, i.e., 60%
value share, 85% volume share and 92% share of the world market by number of
pieces
18
The Indian domestic diamond jewellery market was estimated at around Rs. 76
billion during 2005.
China ranks sixth in the world in terms of diamond jewellery retail value, ahead of
India which is in seventh place. India ranks third in terms of diamond value, while
China holds the seventh position.
Indian diamond jewellery industry is the third largest consumer of polished
diamonds after USA and Japan
Structural Characteristics
The Indian Gems & Jewellery industry is highly fragmented with a large number
of domestic private sector companies. The bulk of the GJ industry in India is
concentrated in the unorganised sector.
The majority of India’s diamond workforce is employed by small units that
process diamonds on a job-lot basis. The number of gold jewellery manufacturing
units is put at 0.1 million.
India is the largest diamond cutting & polishing centre in the world, followed by
Israel and employs an estimated 2 million workers serving over 0.45 million
goldsmiths, and around 0.1 million diamond processing units.
India has several well recognised strengths which have made it a significant force
in the global Gems and Jewellery business, like i) highly skilled, yet low-cost
labour, and ii) established manufacturing excellence in jewellery and diamond
polishing.
19
POLICY
In 1990, the Gold (Control) Act was abolished, which had forbidden the holding
of gold in bar form.
In 1993, the GOI also permitted non-resident Indians (NRIs) to bring 5 kg of gold
into the country twice yearly on the payment of import tax of Rs. 250 per 10
grams; this allowance was raised to 10 kg per trip in January 1997. In 1997, the
GOI also permitted import and export of gold under Open General Licence.
In the trade policy (2004-09) issued in April 2006, the GOI has allowed import of
precious metal scrap and used jewellery for melting, refining and re-export of
jewellery for higher utilisation of melting, refining and jewellery-making
production capacity.
Jewellery is permitted to be exported on a consignment basis, allowing exporters
who have had to deal with the problem of unsold jewellery in foreign markets to
now re-import the unsold pieces. steps taken include allowing exporters to re-
import the rejected precious metal jewellery subject to refund of duty exemption
benefits on the inputs only and not the duty on jewellery as was being done
earlier; reduction in value addition norms for export of gold & silver jewellery
from 7% to 4.5%.
100% FDI is permitted in the Gems & Jewellery sector through the automatic
route
SEZs and Gems and Jewellery Parks have been set up to promote investments in
the sector
20
Cutting and polishing of gems and jewellery treated as manufacturing for the
purposes of exemption under Section 10A of the Income Tax Act
Outlook
India is the fastest-growing jewellery market in the world
Branded jewellery likely to be the fastest-growing segment in domestic sales
The sector is expected to grow at 40% p.a. to $2.2 billion by 2010
Exports expected to grow from $15.5 billion in 2005 to over $25 billion by 2010
India is the most technologically advanced diamond cutting centre in the world
and has the opportunity to address one of the world’s largest and fastest-growing
Gems and Jewellery markets
Indian industry has been gaining prominence as an international sourcing
destination for high quality designer jewellery
Wal-Mart, JC Penney etc. are increasingly procuring jewellery from India
21
India's Exports of Gems & Jewellery (2000-03 to 2006-07)(In US$ million)
ITEMS
2002-03 2003-04 2004-05 2005-06 2006-07
Cut & Polished
Diamonds 6187 5972 7111 8627 11182
Coloured
Gemstones 203 183 192 178 193
Gold Jewellery 1150 1167 1513 268 3813
Pearls 3 3 4 4 3
Non-Gold
Jewellery 56 64 85 99 129
Synthetic Stones 2 2 1 1 1
Costume/Fashion
Jewellery 10 10 10 10 -
sales to Foreign
Tourist 12 13 13 18 -
TOTAL 7622 7414 8929 11620 15320
Exports to Rough
Diamonds 157 142 241 536 358
Net Exports 7779 7556 9170 12156 15678
SOURCE: GJEPC, India
22
MARKET PLAYERS IN GEMS & JEWELLERY INDUSTRY
In the recent years a large number of players have been attracted to the Indian gems
and jewellery retail sector:
Reliance Retail is planning an aggressive entry into the jewellery retail market
through its about 400 to 500 jewellery retail outlets across the country.
Damas India, part of one of the largest jewellery retail outlets in the world, is
adding 16 new stores to its present dozen stores in India.
Swarovski, the global crystal goods manufacturer and marketer plans to set up 30
stores by 2009, from the current 13.
The Gitanjali Group bought 'Nakshatra', the premium brand of jewellery promoted
by Diamond Trading Company (DTC)
Mumbai-based Vardhaman Developers plans to build four more jewellery malls in
the city and is already set to launch Jewel World-Mumbai’s first jewellery mall.
Dubai-based Joy Alukkas has recently opened its largest showroom in Chennai.
Viswa and Devji Diamonds a partnership between the Indian group and the top
jewellery retailer in UAE opened its first diamond retail outlet.
Gitanjal Gems Ltd opened its first luxury jewellery mall in Gurgaon, where a
number of international brands have started their retail business.
Gold Souk India has plans for bringing 100 Souks in 100 months
23
GOLD
The gems and diamonds industry contributes over 15 per cent of India's total exports.
The industry is jewellery industry is predominantly divided into two segments: Gold
jewellery and fabricated studded jewellery (diamonds as well as gemstone studded
jewellery)
India consumes nearly 800 tonnes of gold accounting for about 20 per cent of the
world gold consumption.....of which nearly 600 tonnes goes into making
jewellery.
According to The World Gold Council (WGC) total gold supply in the second
quarter this year stood (Q2FY08) at 840 tonnes, whereas the demand was 944
tonnes.
A study by KPMG reveals the Indian jewellery market to be US$ 13.5 billion in
fiscal 2006-07, accounting for 8.3 per cent of world jewellery sales.
DIAMOND
The Indian diamond trade generates over US$ 4 billion per annum in exports, its large
labor force is integral to catapulting the country as the biggest diamond cutting center
for small roughs. India was known to have diamond mines many centuries ago and
has continued to maintain its tradition of diamond cutting with an estimated 1 million
processors handling over 57 per cent of the world’s rough diamonds by value.
11 out of 12 stones (diamonds) set in jewellery are cut and polished in India
(processing is done on rough diamonds in full range of sizes and qualities,
including stones larger than 10 carats).
24
India's share in this sector is about 80 per cent of the world market.
India also accounts for 90 per cent of the volume of diamonds processed in the
world.
India employs over 90 per cent of the global diamond industry workforce.
'Diamond jewellery consumption is likely to jump to nearly 80 percent in 2010 and
over 95 per cent between 2010 and 2015,' according to Assocham..
India to develop jewellery industry :a global market
India has offered technical support and skill-training help to top diamond and gold
producing African nations, including South Africa, to develop their gem and jewellery
industry. India believes it would be beneficial for the African nations, the largest
producers of rough diamonds and gold, as well as India, which is its biggest
consumer.
Employment
Almost the entire gold and diamond sold or processed in India is imported. Having
futuristic arrangements and agreements with top diamond and gold producing nations
will help this crucial sector to thrive. The aim is to make India a global hub for
diamond market.
Africa alone accounted for nearly 50 per cent of the world's total diamond production,
India was specifically looking at South Africa, Botswana, Ghana, Namibia and
Angola for rough diamonds. Most of the rough diamonds came from Antwerp in
Belgium, but now major suppliers had shown keen interest in supplying uncut stones
directly to Indian companies.
25
Diamond imports
India's diamond imports in 2006-07 stood at $9 billion, while that of gold was $11
billion. Interestingly, India is the largest diamond cutting and polishing centre in the
world. India is also the world's top gold consumer, accounting for about 20 per cent of
global demand at 800 tonnes annually.
Joint venture initiatives
India has also proposed to develop the gem and jewellery industry of these Africa
nations, besides providing skill training. Then there could be joint venture initiatives
between the companies and trade bodies of India and African nations.
26
CHAPTER~4
GOSIL EXPORTS PVT LTD.
HISTORY OF GOSIL EXPORTS
Gosil Exports pvt. ltd. (established in 1998) is a premier fine jewelry
manufacturer serving the needs of wholesale customers. Based in India Gosil is
renowned for its commitment to expertise creativity, quality, value and
professionalism.
Gosil commits being the leading color stone jewelry manufacturers through a
pledge of exceptional selections, professional service and excellent value. We promise
the legacy of trust earned over 9 years of selling fine jewelry, which will be nurtured
in an environment where customer satisfaction is paramount. We promise to be as
dependable as the diamonds and color stone Jewelry we sell.
Gosil exports pvt.ltd. brings to you exclusive designs that are an amalgamation of
regal antiquity and contemporary trends.
Our current manufacturing strength could produce up to 30,000 to 40,000 articles per
month under different process and with variety of colored gemstone combinations
which is a major key strength for us, be it a regular calibrate gemstone or one under
the exotic gemstone category.
Our management principles are based on the natural evolution processess where in
each member tries to achieve the next level of betterment for the overall benefit of the
society.
27
Our jewels are created like art objects. In our unique creations, Gosil Exports has
drawn inspirations from many sources- from the nature, from the ancient cultures and
civilizations. Gosil Exports has a whole gamut of designs and techniques, involving
the mix of gold with rich stones- emeralds, rubies and sapphires and most famously
with diamonds that work so well on gold. We are a reputed manufacturer, exporter
and trader of a vast collection of jewellery including Diamond Jewellery, Gemstones
Jewellery Gold Jewellery, and Precious Stone.
Refined designs, combining the finest aesthetic looks with the highest quality are the
distinguishing elements that characterize our products. Each single piece is made with
the greatest care and attention. Among our top priorities are excellent customer
service and the final satisfaction. Everything that contributes towards reaching the
above objectives is a duty for us. Gosil exports have a huge client base from
international markets. Gosil exports believe in building long-term business
relationships with our customers.
For us, quality is the foremost concern and every step is taken diligently to ensure that
each product, besides being attractive, is also a specimen of the best quality. Gosil
Exports also customize specific designs as per the special needs/requirements of the
buyers. To ensure flawless quality, Gosil Exports subject our products to multiple
rounds of checks.
Our team of quality control professionals monitors each and every level of the
manufacturing stage, right from the procurement of raw material to the dispatch of
finished products in the market.
28
The Diamonds & gems stones, Gosil Exports use in our products are of superior
quality brought from different parts of the world so that Gosil Exports can guarantee
customer satisfaction. The design of our finest pieces of jewelry gives us another edge
over others.
Gosil Exports specialize in:
Diamonds, Rings, Pendant, Bracelet, Earrings and Ring Sets, Gemstone Rings,
Gemstone Pendant, Gemstone Bracelet, Gemstone Earrings, Gold, Precious Stones.
So Gosil Exports believe in building long-term business relationships with our
customers. Our whole team is dedicated to serve customers and provide them with
innovative jewelry designs that are liked by people of all age groups.
GOSIL EXPORTS (P) LTD.
E-70, EPIP, SITAPURA,
JAIPUR-303905,
INDIA.
TEL: +91-141-5142065
FAX: +91-141-2771064
Email: [email protected]
29
PRODUCTS OF GOSIL EXPORTS
30
GOSIL EXPORTS
Product Name : Rhodium Plated Bracelets
GOSIL EXPORTS
Product Name : Rhodium Plated Bracelets
31
GOSIL EXPORTS
Product Name : Rhodium Plated Bracelets
GOSIL EXPORTS
Product Name : Rhodium Plated Pendent Sets
CHAPTER~5
32
RESEARCH METHODOLOGY
The appropriate research design formulated is detailed below.
Exploratory research: this kind of research has the primary objective of development
of insights into the problem. It studies the main area where the problem lies and also
tries to evaluate some appropriate courses of action.
The research methodology for the present study has been adopted to reflect these
realties and help reach the logical conclusion in an objective and scientific manner.
The present study contemplated an exploratory research
NATURE OF DATA
Primary data: primary data will be collected through a questionnaire raised
among the Gems And Jewellery traders and manufacturers in
Jaipur
SAMPLE SIZE 100
SAMPLE AREA JAIPUR
SAMPLE UNIT GEMS AND JEWELLERY TRADERS &
MANUFACTURERS OPERATING IN JAIPUR, IN
PARTICULAR THE OWNERS, MANAGERS & OTHER
OFFICIALS OF GOSIL EXPORTS (JAIPUR)
SAMPLING TECHNIQUE RANDOM SAMPLING TECHNIQUE
33
Secondary data: secondary data that is already available and published .it could be
internal and external source of data. Internal source: which originates from the
specific field or area where research is carried out e.g. publish broachers, official
reports etc.
External source: This originates outside the field of study like books, periodicals,
journals, newspapers and the Internet.
DATA COLLECTION
Secondary data has been used which is collected through articles, reports, journals,
magazines, newspapers reports prepared by research scholars, universities and
internet
SAMPLING TECHNIQUE
Random sampling technique has been employed to extract the fruitful results.
CHAPTER~6
34
DATA PRESENTATION
SWOT ANALYSIS OF INDIAN GEMS & JEWELLERY
INDUSTRY:
Strengths:
About one million craftsmen are associated with this industry. Their skills can be
utilized for designing and making modern Jewellery
Availability of abundance of cheap and skilled labor in India.
Presence of excellent marketing network spread across the world.
Supportive government industrial/ EXIM policy.
Weaknesses:
Small firms lacking technological/ export information expertise.
Low productivity compared to labor in china, Thailand and Sri Lanka.
As the major raw material requirements need to be imported, companies normally
stock huge quantities of inventory resulting high inventory carrying costs.
Opportunities:
New markets in Europe & Latin America
Growing demand in South Asian & Far East countries.
Rupee value depreciating resulting in a windfall increase in the profitability.
Industry moving from a phase of consolidation
35
Threats:
China, Sri Lanka and Thailand's entry in small diamond segment
Infrastructure bottlenecks, absence of latest technology
Unusual increase in the prices of gold and rough dia
PRESENT STATE OF THE INDUSTRY:
36
The year 2007-08 has witnessed a growth in all the major segments of the Gem and
Jewellery industry and the total exports stood at Rs.67500 crore, a growth of 29.27%
as compared to the previous year. Exports of diamond have continued to rise and the
Jewellery sector has turned in another record-breaking performance. India’s share of
the world's polished diamond market is 60 per cent in terms of value, 85 per cent in
terms of volume and 92 per cent in terms of pieces.
Global gold Jewellery consumption increased 33% in the year 2005, the buoyant demand in
countries like India, the Gulf States, China and Turkey pulled up the overall figures. Since
early 90's, the Jewellery has averaged a growth of over 30%, making India the fastest
growing Jewellery exporter in the world and also in the year 2004 the demand for gold
Jewellery in India increased by 29% in value to become the fastest growing Jewellery market
in the world.
2004-05 2005-06 2006-07 2007-08
Diamonds
37
India enjoys domination in the world cut and polished diamond market and smaller
diamonds in particular, which was amply reflected in the export growth of diamond
industry with a total export of US$ 11181.48 million (48000 crore) for the year ended
31st March, 2008 as compared to US$ 8627.48 million (37000 crore) against the
corresponding period in last year.
Jewellery
The year 2007-08 was a good year for the global Jewellery sales as well as to the
Company. Demand was fuelled by good economic growth and improved demand
particularly from Asia and the Middle East. Gold Jewellery sales in United States of
America increased by 4% in 2007 to a huge 73000 crore. The Jewellery sector
recorded a massive growth of 49.23% for the year ended 31st March 2008. The
demand for the diamond Jewellery will continue to grow stronger due to continued
marketing support by the industry especially in the U.S., India and China. The
Jewellery has an ever-increasing market abroad and the company with its
manufacturing facility comparable to international standards has been able to capture
a reasonable portion of the same. While opportunities are abundant, political
uncertainty could affect this industry most.
Major Players:
Vaibhav Gems Ltd.
Classic Diamond (India) Ltd.
Shrenuj & Company Ltd.
Goldiam international Ltd.
38
Su-raj Diamonds & Jewellery Ltd.
Rajesh Exports Pvt. Ltd.
Financial Comparison
* Figures up to March 2008
TopicsShrenuj & Company Ltd.
Goldiam International Ltd.
Rajesh Exports Pvt. Ltd
Su-Raj Diamonds & Jewellery Ltd.
Vaibhav Gems Ltd.
Classic Diamond (India) Ltd.
Adjusted EPS (Rs)
10.24 14.95 125.42 7.62 13.39 17.19
Cash EPS (Rs) 12.61 15.78 127.47 8.31 14.56 20.11Book Value (Rs) 104.46 102.83 211.62 121.56 60.54 204Dividend Per Share (Rs)
3 2.5 10 1.2 2.5 1.8
Return On Net Worth (%)
9.8 17.82 29.08 6.27 23.62 8.42
Return On Capital employed (%)
8.99 15.2 73.1 8.76 24.49 8.56
Operating Profit Margin (%)
7.35 11.39 -1.43 4.41 10.04 6.8
Gross Profit Margin (%)
6.82 10.77 -1.46 4.18 9.31 6.44
Net Profit Margin (%)
2.28 13.48 1.01 2.98 9 2.12
Current Ratio 6.39 4.44 16.51 3.57 7.56 5.82Quick Ratio 2.92 3.83 15.3 2.93 4.47 3.47Long term debt to equity
2.26 0 0.2 0 0 2.17
Total Debt to equity
2.26 0 4.33 0.42 0.44 2.17
Interest Cover (times)
2.24 68.09 3.07 4.36 10.33 1.97
Assets Turnover Ratio
8.2 11.28 76.52 20.6 10.64 17.53
39
Average Raw Material Holding (in Days)
0 34.47 0 20.77 97.44 0
Average Finished Good Holding (in Days)
0 5.26 4.83 33.2 1.66 0
Number of days of net working capital
230.91 183.36 65.41 208.78 164.39 263.21
Inventory Turnover Ratio
2.42 11.28 71.72 7 4.71 2.81
Export as % of Total Sales
0 100.61 99.17 94.35 99.64 0
Bonus component in Equity (%)
0 70.42 0 26.2 69.07 0
FUTURE PROSPECTIVE:
With the world economy doing well and increase in the personal disposable income of
the general public demand for the gems and Jewellery has increased worldwide. This
year Jewellery sector grew by 49%. Exports contribute 70% of the total sales of the
40
industry. With United States contributing most (35%) in the export bill. With rupee
value depreciating against the U.S. dollar there may be a windfall increase in the
profitability in the coming times for the industry. Many companies are on the hunt for
acquiring subsidiaries Indian companies will able to strengthen their retail network.
One of the areas of concern for the industry is the surge in the prices of rough
diamond pieces and India depends upon other countries but with the proposal of
increase in the FDI limit on mining from 74% to 100%, dependence on the other
countries will be reduced. Overall with the economic fundamentals looking good,
favorable government policies and exploration of the newer markets industry looks all
set for a good time ahead.
Government Policy:
Levy of two per cent excise duty on premium branded Jewellery.
100 per cent Export Oriented Units (EOUs) and units in the Export Processing
Zones (EPZs)/Special Economic Zones (SEZs), enjoy a package of incentives and
facilities, which include duty free imports of all types of capital goods, raw
material, and consumables in addition to tax holidays against export.
Currently 74% FDI in Mining, 100% proposed.
41
QUESTIONNAIRE ANALYSIS
1. Role of the Gems & Jewellery industry to the Indian economy.
Very Significant -------------------------------- 19 per cent
Significant -------------------------------------- 38 per cent
Insignificant ------------------------------------ 20 per cent
Very insignificant ----------------------------- 07 per cent
Do not know/ can not say -------------------- 16 per cent
42
Interpretation:
As may be seen from the above response that the Gems & Jewellery sector in India
contributes significantly to the Indian economy
43
2. Contribution of the Gems & Jewellery sector.
Employment ------------------------------------------- 72 per cent
Export -------------------------------------------------- 46 per cent
GDP---------------------------------------------------- 32 per cent
Other sectors ----------------------------------------- 25 per cent
Do not know/ can not say --------------------------- 07 per cent
44
Interpretation:
Gems & Jewellery sector occupies an important place in the Indian economy as it
contributes significantly to employment generation and export earnings. The
economic importance of the sector also lies in its high employment potential, high
capital investment, high value addition and continuously increasing demand both in
the domestic and overseas markets.
45
3. The Impact of globalization and liberalization to the Gems &
Jewellery export.
Accelerated the export ------------------------------------ 76 per cent
Adversely affected the export --------------------------- 10 per cent
Did not affect the export --------------------------------- 07 per cent
Do not know/ can not say ------------------------------- 07 per cent
46
Interpretation:
Indian Gems & Jewellery are now available in global markets, so also foreign crafts
in our shops. Gems & Jewellery constitute a significant segment of the decentralized
sector of our economy and its importance is being felt when it is assessed that it
provides employment to lakhs of jewellery –makers scattered especially in the weaker
sections of our society such as SCs, STs and the women, producing goods worth
thousands of Crores of Rupees per year.
47
4. The growth of e-commerce is beneficial to Gems & Jewellery sector.
Agree ------------------------------------------ 68 per cent
Disagree -------------------------------------- 20 per cent
Do not know/ Can not say ------------------ 12 per cent
Interpretation: With the growth of e-commerce strategy, the Indian Gems &
Jewellery marketing strategy has been strengthened, leading to increase in the volume
of trade in the Gems & Jewellery sector.
48
5. E-commerce is beneficial for the urban artisans instead of rural.
Agree ------------------------------------------- 68 per cent
Disagree --------------------------------------- 20 per cent
Do not know/ Can not say ------------------- 12 per cent
Interpretation: The e-commerce strategy in the Gems & Jewellery sector has
been of limited utility confining itself more in the urban sector. Its expansion to the
rural areas will be expanding its utility in a more effective manner.
49
6. Better potential importers of Indian Gems & Jewellery product.
USA -------------------------------------------- 52 per cent
UK --------------------------------------------- 22 per cent
Germany -------------------------------------- 15 per cent
Other countries ------------------------------ 11 per cent
Interpretation: The largest export market for Indian Gems & Jewellery is the
United States. In the changing world scenario, Gems & Jewellery products exported
to various countries form a part of lifestyle products in international market. The
impact is due to the changing consumer taste and trends.
50
7. Exported product from India to other country.
Diamond studded jewellery ------------------------ 15 per cent
Necklaces ---------------------------- 32 per cent
Bangles --------------------------------------------- 28 per cent
Rings & Other products ------------------------------------ 25 per cent
51
Interpretation: As far as the products which are exported out of the country, the
respondents felt that it is the Diamond studded jewellery, Necklaces, Bangles, Rings
& Other products which dominate the export composition of the Gems & Jewellery
products.
8. The challenges of the Gems & Jewellery export.
Better quality products from foreign companies -------- 33 per cent
Competition in the domestic sector ----------------------- 23 per cent
Lack of institutional support ------------------------------- 25 per cent
Other factors ------------------------------------------------- 12 per cent
Do not know/ can not say ---------------------------------- 07 per cent
52
Interpretation: There are various problems and challenges that stand as barriers
to the export market of the Indian Gems & Jewellery products. These include better
competitiveness of the foreign companies followed by lack of institutional support,
competition in the domestic sector and other factors.
53
9. The vital steps for improving the Gems & Jewellery export.
Establishing Gems & Jewellery special economic zones -------- 30 per cent
Promotion of Gems & Jewellery in the rural areas --------------- 20 per cent
Special support to the Gems & Jewellery sector in the trade policy - 27
per cent
Institutional financing ---------------------------------------- 15 per cent
Other measures ------------------------------------------------- 08 per cent
54
Interpretation: Setting up Gems & Jewellery special economic zones accompanied
with institutional support and other promotional measures can be effective to improve
the export potential of the Indian Gems & Jewellery products.
55
10. Competition of India with china, Philippines and Thailand in regarding
Gems and Jewellery export.
Very competitive --------------------------------- 18 per cent
Competitive --------------------------------------- 35 per cent
Lacks competitive strength --------------------- 20 per cent
Not at all competitive --------------------------- 12 per cent
Do not know/ can not say ---------------------- 15 per cent
56
11. Future of the market of the Gems & Jewellery export in India.
Very good ------------------------------------------- 24 per cent
Good ------------------------------------------------- 35 per cent
Not good -------------------------------------------- 20 per cent
Do not know/ can not say ------------------------ 31 per cent
57
CHAPTER~7
CONCLUSION
Growth in global demand for jewelry may slow from the 5.2 percent Compounded
Annual Growth Rate (CAGR) it registered since 2000, to 4.6 percent by 2010 or
2015, unless appropriate collective action is taken by players in the industry.
The projection is based on an assessment of the impact of eight key business trends
that the two bodies believe will affect the performance of the industry. These trends
include: the local beneficiation in the mining countries; fragmentation of supply
sources and an increase in rough supply; consolidation across the value chain; rise of
new centers for jewelry manufacturing; growth in the use of synthetics and non-
precious metals in jewelry; a decline in demand for plain gold jewelry; organization
and consolidation in the emerging markets of India and China; and intense
competition from other luxury goods.
Based on the findings, the report estimates that worldwide jewelry sales will rise from
$146 billion in 2005 to $185 billion in 2010 and $230 billion in 2015. However, it
stresses that if the industry as a whole focuses on “growing demand for jewelry as a
category” and “strengthening industry-level and enterprise-level capabilities” in the
“next 12-18 months,” sales could reach $280 billion in 2015, registering a CAGR of
6.7 percent.
Some of the statistical highlights include:
Gold and diamond jewelry will continue to dominate the market, accounting
for about 82 percent of overall market share
58
Diamond jewellery will be the slowest growth segment at a Compounded
Annual Growth Rate of 3.3 percent
Synthetics will have sales of close to $2 billion at wholesale price by 2015,
and will impact sales of natural diamond jewelry to the extent of $6 billion at
the retail level
Palladium is expected to establish itself as an alternative metal for jewelry
fabrication
China (13 percent) and India (12 percent) together will emerge as a market
equivalent to that of the US share (26% percent)
Middle East (9 percent) will be another large market
China, Turkey and India will emerge as new centers for jewelry fabrication
Value addition in diamond processing will increase from 29.3 percent to 34.1
percent
India’s share in diamond processing will drop from about 57 percent by value
to 49 percent
China’s share in diamond processing will rise to 21.3 percent
About 9 percent of world’s diamond will be processed locally by mining
countries
Centralized distribution of rough will drop from 55 percent in value to 40
percent
59
Rough sold through traders will account for 45 percent
BIBLIOGRAPHY
Daily newspapers
www.indiabulls.com
www.myiris.com
www.moneycontrol.com
www.google.com
www.altavista.com
60
ANNEXURE
QUESTIONNAIRE
1. How do you perceive the contribution of the Gems & Jewellery industry
to the Indian economy?
Very Significant -------------------------------- 19 per cent
Significant -------------------------------------- 38 per cent
Insignificant ------------------------------------ 20 per cent
Very insignificant ----------------------------- 07 per cent
Do not know/ can not say -------------------- 16 per cent
2. Select the areas in which the Gems & Jewellery sector contribute
significantly. You can choose more than one option.
Employment ------------------------------------------- 72 per cent
Export -------------------------------------------------- 46 per cent
GDP---------------------------------------------------- 32 per cent
Other sectors ----------------------------------------- 25 per cent
Do not know/ can not say --------------------------- 07 per cent
61
3. How did the policies of globalization and liberalization affect the
export scenario of the Gems & Jewellery in India?
Accelerated the export ------------------------------------ 76 per cent
Adversely affected the export --------------------------- 10 per cent
Did not affect the export --------------------------------- 07 per cent
Do not know/ can not say ------------------------------- 07 per cent
4. Do you agree that with the growth of e-commerce strategy, Indian Gems
& Jewellery sector has been positively benefited from this?
Agree ------------------------------------------ 68 per cent
Disagree -------------------------------------- 20 per cent
Do not know/ Can not say ------------------ 12 per cent
5. Is it true that the e-commerce strategy has been more beneficial only in
the urban areas leaving the rural artisans out side the ambit of this
strategy?
Agree ------------------------------------------- 68 per cent
Disagree --------------------------------------- 20 per cent
Do not know/ Can not say ------------------- 12 per cent
62
6. Which countries are the better potential importers of Indian Gems &
Jewellery products?
USA -------------------------------------------- 52 per cent
UK --------------------------------------------- 22 per cent
Germany -------------------------------------- 15 per cent
Other countries ------------------------------ 11 per cent
7. What are the products which are exported from India to other countries?
Diamond studded jewellery ------------------------ 15 per cent
Necklaces ---------------------------- 32 per cent
Bangles --------------------------------------------- 28 per cent
Rings & Other products ------------------------------------ 25 per cent
8. What are the problems of the export of the Gems & Jewellery products
from India?
Better quality products from foreign companies -------- 33 per cent
Competition in the domestic sector ----------------------- 23 per cent
Lack of institutional support ------------------------------- 25 per cent
Other factors ------------------------------------------------- 12 per cent
Do not know/ can not say ---------------------------------- 07 per cent
63
9. What are the measures that can be taken for improving the export
potential of the Gems & Jewellery sector in India?
Establishing Gems & Jewellery special economic zones ---------- 30 per cent
Promotion of Gems & Jewellery in the rural areas ----------------- 20 per cent
Special support to the Gems & Jewellery sector in the trade policy - 27 per cent
Institutional financing ---------------------------------------- 15 per cent
Other measures ------------------------------------------------- 08 per cent
10. How do you compare the export potential of the Indian Gems & Jewellery
products when compared with other countries Gems & Jewellery
products like that of china, Philippines and Thailand?
Very competitive --------------------------------- 18 per cent
Competitive --------------------------------------- 35 per cent
Lacks competitive strength --------------------- 20 per cent
Not at all competitive --------------------------- 12 per cent
Do not know/ can not say ---------------------- 15 per cent
11. Future of the market of the Gems & Jewellery industry in India.
Very good ------------------------------------------- 24 per cent
Good ------------------------------------------------- 35 per cent
Not good -------------------------------------------- 20 per cent
Do not know/ can not say ------------------------ 31 per cent
64
