In a sharp turnaround in global consumer sentiment, gems and jewellery exports from India jumped 56 per cent in November after a sustained decline over the previous months. Gems and jewellery exports from India are down by over 13 per cent, year on year, between April and October 2017.
Data compiled by the apex industry body, the Gems and Jewellery Exports Promotion Council (GJEPC), show net exports of gems and jewellery shot up to $2.78 billion (Rs 18,002 crore) in November 2017 from $1.77 billion (Rs 12,001 crore) during the same month last year.
The sudden spurt in jewellery demand, especially from the US, has brought cheer to Indian exporters. Retailers in the world’s largest jewellery market (US) saw increased consumer footfalls. Some of the surge is also due to the base effect and other factors.
“We had Diwali last year in November, which resulted in closure of manufacturing units. This year, Diwali was in October. So jewellery manufacturers and exporters utilised the full month for executing overseas orders. Indian exporters delivered to buyers their entire consignments that were stuck because of GST (goods and services tax) headwinds. Since the issues hindering growth in exports were eased, exporters utilised the opportunity to fulfill orders. All these worked together to propel growth in gems and jewellery exports in November,” said Praveen Shankar Pandya, Chairman, GJEPC.
The phenomenal growth in November has covered a part of India’s loss in gems and jewellery exports between April and October. During the first seven months of the current financial year, gems and jewellery exports fell 13.18 per cent to $19.57 billion (Rs 1,26,172 crore) from $21.73 billion (Rs 1,45,331 crore) in the same period last year. “There has been a phenomenal growth in business recorded in the US. We expect 6-7 per cent in growth in sales this year compared to last year,” said Mehul Choksi, managing firector, Gitanjali Gems, one of India’s largest exporters of branded diamond jewellery to the US.
The peak five-week jewellery demand season starts with Thanksgiving (November 27 this year) and continues till the New Year. The season clocks nearly two-thirds of annual jewellery demand globally. The US contributes nearly 40-42 per cent of global annual jewellery demand. “We are keeping our fingers crossed for retail jewellery demand in the US. While we see positive indications among consumers, actual figures will come by January first week. But we are hopeful for a positive business trend from the US,” said Pandya.
The spurt in jewellery exports was driven by a phenomenal jump in shipments of gold jewellery and cut and polished diamonds.
While gold jewellery exports jumped by 75.46 per cent to $996.32 million (Rs 568 crore) in November this year, shipments of cut and polished diamonds shot up by 50 per cent to $1.78 billion (Rs 11,520 crore) in the month under consideration.
Rajiv Popley, managing director, Popley & Sons, however, feels that gold jewellery exports from India will face tough competition, especially in the Middle East, one of the largest importers of jewellery globally. This is due to levy of value-added tax (VAT) in the Gulf Cooperation Council (GCC) region effective January 1, 2018.
The GCC region has levied a 5 per cent import duty on gold jewellery from January 1, 2017, to promote local manufacturing.