Final Gems and Jewellary

8/2/2019 Final Gems and Jewellary

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GEMS AND JEWELLARY


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Group Members

Kavita Jaiswal 09

Pramod Patel 19

Saurabh Patki 23 Madhavi Pawar 24


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Gems and Jewellery Industry in India

The gems and jewellery industry in India occupies a significant position inthe Indian economy.

The market encompasses various kinds of jewels including gold, coloredgemstones, costume jewelleries, platinum and diamonds. The sector isexpected to register a compound annual growth rate (CAGR) of 13 per centduring 2011- 2013, according to a RNCOS report titled, 'Indian Gems andJewellery Market Forecast to 2013'.

Gold covers about 80 per cent of the Indian jewellery market and the rest ofthe part is covered by the fabricated studded jewellery consisting diamondand gemstone studded jewellery. Apart from that India has also emerged asthe largest cutting and polishing industry for diamond in the world.

The country's men's jewellery market in the world in 2011 is estimated atapproximately Rs 954 crore (US$ 193.9 million) in sales.

The journal estimated that by 2015 the gems and jewellery sector will helpIndia earn about US$ 25 billion to US$ 35 billion in form of exportrevenue.


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A steady sale of jewelleries, especially of gold, has helped the gems andjewellery industry in India flourish at this rapid rate. In addition, India hasevolved as a great place for diamond processing, according to the industrybody.

Gems and Jewellery Industry in India: Industry Structure

The jewellery industry in India is estimated at Rs 150,000 crore (US$ 30.49billion) industry of which only 5 per cent is organised, thus creatingopportunity for the foreign players to enter the Indian market andincreasingly making the Indian market organised.

The global demand for gold in 2011 rose to 4,067.1 tonnes worth anestimated US$ 205.5 billion - the first time that global demand hasexceeded US$ 200 billion and the highest tonnage level since 1997,

according to a report released by the World Gold Council (WGC). Themain driver for this increase was the investment sector where annualdemand was 1,640.7 tonne, up by 5 per cent as compared to the record setin 2010 and with a value of US$ 82.9 billion.


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Size Large market for Gems & Jewelery with domestic sales of over $10

billion. 4% of the global Gems and Jewelery market .

Exports of over $15.5 billion; over 18% of Indias exports. India is the largest consumer of gold jewelery in the world. Accounts for about 20% of world consumption. India is the largest diamond cutting and polishing centerer in the

world. 60% value share, 85% volume share and 92% share of the world

market by number of pieces. Third largest consumer of polished diamonds after USA and

Japan.Structure The Indian Gems & Jewelery industry is highly fragmented with a

large number of domestic private sector companies. A large portion of the market is in the unorganized sector . India is gaining prominence as an international sourcing destination

for high quality designer jewelery . Walmart, JC Penney etc. procure jewelery from India .


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Policy 100% FD is permitted in the Gems & Jewelery sector through the automatic route. SEZs and Gems and Jewelery Parks have been set up to promote investments in the

sector.

Opportunity India is one of the largest exporters of gems and jewelery India is the diamond

polishing capital of the world.

Outlook India is the fastest-growing jewelery market in the world.

Branded jewelery likely to be the fastest-growing segment in domestic sales. 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.

Potential India has several well recognized strengths which have made it a significant force in

the global Gems and Jewelery business. Highly skilled, yet low-cost labor. Established manufacturing excellence in jewelery and diamond polishing. India is the most technologically advanced diamond cutting center in the world. Opportunity to address one of the worlds largest and fastest-growing Gems and

Jewelery markets. Opportunity to leverage Indias strengths to address the global market


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The Gem and Jewellery ExportPromotion Council

Set-up in 1966, the GJEPC has over the years effectively moulded the scattered efforts ofindividual exporters to make the gem and jewellery sector a powerful engine driving India'sexport-led growth.

This apex body of the gem & jewellery industry has played a significant role in the evolutionof the Indian gem and jewellery industry to its present stature.

GJEPC is continuously working towards creating a pool of artisans and designers trainedto international standards so as to consolidate the Indian jewellery industry and establish itas a prominent global player in the jewellery segment.

With strength of 6,500 members' spread all over the country, the Council is primarilyinvolved in introducing the Indian gem & jewellery products to the international market andpromotes their exports. To achieve this, the Council provides market information to itsmembers regarding foreign trade inquiries, trade and tariff regulations, rates of importduties, and information about jewellery fairs and exhibitions.

The role of GJEPC can be broadly classified under the following categories:

Trade Facilitator : The Council undertakes direct promotional activities like organising jointparticipation in international jewellery shows, sending and hosting trade delegations, andsustained image building exercises through advertisements abroad, publications andaudio-visuals.GJEPC also invites countries to explore areas of co-operation in supply ofrough diamonds and rough colored stones as well as offers co-operation in jewellerymanufacturing. The Council regularly communicates with Indian Embassies, trade bodiesand associations in various countries. And finally, GJEPC also organizes seminars, buyer-seller meets, symposiums.


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Advisory Role : A crucial area of activity of the Council has also been

aiding better interaction and understanding between the trade and thegovernment. The Council takes up relevant issues with government and

agencies connected with exports and submit documents for considerationand inclusion in the Exim Policy. The Council also grants membership,registration certificates and performs other roles as per the Exim Policy.

Nodal Agency for Kimberly Process Certification Scheme : GJEPCworks closely with the Government of India and the trade to implement andoversee the Kimberly Process Certification Scheme. To that effect, theCouncil has been appointed as the Nodal Agency in India under the

Kimberly Process Certification Scheme. Training and Research : The Gems & Jewellery Export Promotion Councilruns a number of institutes that provide training in all aspects ofmanufacture and design in Mumbai, Delhi, Surat and Jaipur. These trainingprograms are being conducted to ensure that the Indian industry achievesthe highest levels of technical excellence.

Varied Interests : The Council also publishes a number of brochures,

statistical booklets, trade directories and a bi-monthly magazine - SolitaireInternational, which is distributed internationally as well as to its members.Finally, the Council has also developed its own promotional audiovisual film- 'India - Your First Choice', which is dubbed in various internationallanguages as well as screened at various trade shows


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Government Initiatives(m)

In the New Annual Supplement to Foreign Trade Policy (2004-2009) announced on April 19, 2007, the Government has extended

the following facilities to this sector:

Service Tax on services (related to exports), which are renderedabroad have been exempted.

Re-import of Diamonds & Jewelery (either in complete or partial lot)exported on consignment basis have been allowed.

In the light of increase in global prices of precious metal, duty freeentitlement for consumables for export of rhodium plated silverjewelery has been increased to 3 per cent.

To reduce the transaction cost for the diamond sector, testing facilityat International Diamond Laboratory (IDL), Dubai, has beenincorporated in the list of laboratory/certifying agencies.

Duty free import entitlement of tools, machinery & equipment hasbeen allowed. For metals other than gold, platinum, it will be 2 percent and for gold and platinum, it will be 1 per cent of FOB value ofexports during the previous financial year.

Categorization of exporters as One to Five Star Export Houses hasbeen changed to Export Houses and Trading Houses with

rationalization and change in export performance parameters.


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In addition, the Government has decided to make goldhallmarking mandatory from January 1, 2008. It has alsomade the import of polished diamonds completely dutyfree. This will facilitate the sector towards evolving from

being just a manufacturing centerer to becoming a globaltrading hub for diamonds, gems and jewelery.

The committee appointed to study India's NationalDesign Policy is likely to recommend the setting up of

four additional National Institutes of Design (NIDs), alongthe lines of the existing Ahmadabad-based NID, whosecurriculum includes, among other disciplines, jewelerydesign


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Major Players in the Jewelery Market

Existing and new foreign players are drawing plans for expansionand launch of their operations in India:

De Beers has got permission to survey for diamonds in Jharkhand, Italian luxury silverware manufacturer, Greggio Argento, will set up

two exclusive stores in Mumbai and Delhi within the next three

months, through a marketing tie-up with Gitanjali Lifestyle

asubsidiary of Gitanjali Gems. Swarovski, the global crystal goods manufacturer and marketer, is

on an expansion spree in India and hopes to achieve 5 to 10 percent of the global turnovers from the country in the next ten years.The company plans to set up 30 stores by 2009, from the current 13.

Damas India, part of one of the largest jewelery retail outlets in theworld, is adding 16 new stores to its present dozen stores in India.


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Simultaneously, domestic players arealso drawing aggressive plans:

Shrenuj & Company Ltd has acquired 84.6 per cent stake in the US-basedjewelery distributor Simon Golub & Sons Inc for US$ 22.7 million.

Kerala-based jeweller Malabar Gold will spend US$ 48 million over the nextyear in order to expand its presence in southern India as well as abroad.

Gitanjali Gems Ltd, a Mumbai-based jeweller, has incorporated a wholly-owned subsidiary in Dubai, Gitanjali Ventures DMCC, whose main activity is

trading in diamonds, precious stones, diamond jewelery and pearls. Also, the Gitanjali Group has announced its foray into the luxury retailmarket through a new entity Luxury Connexions'. The company will investUS$ 24.5 million over three years to set up luxury malls in eight leadingcities across the country.

Two new special economic zones (SEZs) for gems and jewelery are to comeup at Goregaon and Dhulia, both in Maharashtra. Also, the state-run

Minerals and Metals Trading Corp. (MMTC), plans to establish a gems andjewelery special economic zone (SEZ) in partnership with a privatecompany


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Budget 2012 highlights

Gold and Platinum costly

Customs duty on standard gold bars; gold coins of purityexceeding 99.5% and platinum from 2% to 4%

Customs Duty on non-standard gold from 5% to 10%

Basic duty on gold ore, concentrate and dore bars for refininghas also been double to 2%.

Excise duty on refined gold has been increased from 1.5% to3%


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Budget 2012 Effects

Effect:

1. Gold can get costlier by 3-4% as jewellers will pass oncustoms duty and excise duty on to the consumers.

2. It can also encourage import of gold unenthically

hampering.3. Gold jewellery makers such as Gitanjali Gems and Titan

Industries will also be hit due to high costs and asexpensive jewellery will deter buyers hurting sales volume.

4. Gold loans providers such as Muthoot Finance and

Manappuram Finance Ltd may see slower volume growthafter basic customs duty on gold was doubled


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Trader Insight:Mr.J D Mistry


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Trader Insight

Prominence of Palanpuri Jain Community

Surat Main Hub other centres include :Panchratna building,Diamondbourse in BKC

Skilled labour at low cost

More than 80% diamonds cut ,polished in India Diamond Market slow down after U.S recession and Japan Tsunami

GIA certificate

Angadiya


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Trader Insight

One window clearance system in gujrat

SEZ big help to traders

Govt Interference less

Lots of Black Money

Government support for infrastructure Business based on trust, reputation

Chinese Delegation


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Thank You

Documents

Final Gems and Jewellary