India's exports of cut and polished diamonds, gold jewellery and gem stones may rise around 10 per cent year-on-year in the current financial year ending March 2019, the Gems and Jewellery Export Promotion Council (GJEPC) said on Thursday.
In 2017-18, India's total gems and jewellery exports declined 5 per cent from a year ago to $39.48 billion, due to a sharp fall in silver jewellery exports (-16 per cent). Exports of other products, which includes pearls, synthetic stones, custom fashion jewellery and gold medallion, slumped 60 per cent.
However, cut and polished diamonds exports gained 4 per cent to $23.73 billion and gold jewellery exports were up near 11 per cent to $9.67 billion.
The growth this year is expected to be driven by rising diamond prices, pickup in demand in major markets like the US, Europe and China as well as some devaluation of the Rupee.
“Typically, diamond prices every year have gone up by 3-5 per cent. If you look at the main markets like America, China, Europe, they are looking pretty good this year. Everyone's on a comeback. We are targetting 3-5 per cent in terms of price, then there will be some benefit we get on devaluation, some benefit from demand creation; all put together will be at 10 per cent (growth),” said Colin Shah, vice-chairman of GJEPC India.
The Gems and Jewellery Industry in India has been in the spotlight in the wake of the alleged fraud by billionaire diamantaire Nirav Modi and his uncle and promoter of Gitanjali Gems, Mehul Choksi.
GJEPC officials say that all efforts are being made to drive growth.
“We are fighting a war on all fronts. We are working on the skill of the worker, we are working on the designs, we are working on self-regulation, making the companies better, we are working on demand creation, buyer-seller meets and we are developing new markets,” said Shah, adding that value added jewellery will also be a key.
In the wake of the Nirav Modi fraud, several banks have lowered their credit limits to diamond traders. GJEPC officials say that while the “faith has shaken” in the industry, it is now getting all the stakeholders together through a seminar next month to address key challenges faced by the diamond industry.
“There is no immediate effect, but we do expect in the long-term there will be a effect,” said Shah.
So, the GJEPC is emphasising on “self-regulation” by companies, and intends to strengthen the My KYC Bank portal, where companies registered have to go through a deeper KYC (know your customer) exercise than what a bank would do, and there is a thorough vetting of the firms by the council.
Currently, around 1,000 members are on the portal and GJEPC officials say it is advising banks to fund those entities that are registered here, which could in a way avoid any future instances of fraud.