Rising gold prices have posed certainly a deterrent for jewellery sales in the United States
India’s gems and jewellery
sector hopes to tap a $1-billion export opportunity arising out of an ongoing trade war between the United States (US) and China. The opportunity came India’s way after the US levied a 10 per cent import duty on import of gems and jewellery
from China, taking the tariff to 20.5 per cent. A few months ago, the US imposed a 5.5 per cent tariff on import of jewellery from India which still leaves the country with a 15 per cent advantage over China.
China exports around $2 billion worth of gems and jewellery
to the US. But, in the absence of policy support from the government, industry has failed to grab the export market share that competing countries like Thailand and Vietnam have succeeding in.
“Given that Thailand and Vietnam have already started grabbing the opportunity emerged after the US-China trade war, we are looking at a $1-billion opportunity for India while the remaining will go to other South East Asian countries,” said Colin Shah, vice-chairman, Gems and Jewellery Export
Promotion Council (GJEPC), India’s premier jewellery export
promotion body under the Ministry of Commerce.
The US is the largest consumer of gems and jewellery in the world contributing nearly 40 per cent of the global production.
In order to lure US jewellery consumers, GJEPC
recently organised a buyer-seller meet which was attended by 23 leading jewellery players in the United States.
Many Indian jewellers showcased their innovations to attract US business which otherwise would have gone to China. Two similar events are scheduled to be organised this year.
India’s annual gems and jewellery export
to the US stands at $10 billion. If India can tap the opportunity, its overall exports to the US could jump by 10 per cent to $11billion this year.
The export fell 11.2 per cent to $2.7 billion in July compared to a year ago while overall exports in the first four months of this financial year fell 9.32 per cent to $12.15 billion.
Meanwhile, the Gem and Jewellery Institute of Thailand has said the value of exports from January to July was recorded at $9 billion, a year-on-year increase of 29.3 per cent.
Industry has sought the government’s support. Several Chinese jewellery manufacturers, irked by high tariff, have put out some feelers to Indian industry on moving their operations to India if the government provides support by relaxing norms governing special economic zones.
US buyers are looking at India favourably as the country already exports $10 billion worth of jewellery there. “Apart from cost effectiveness, we prefer the design and technology–enabled natural diamond jewellery studded with colour gemstones. We will certainly go back (to the US) and look to place some orders. India has been a preferred choice for us,” said Trish Roberson, a senior official with Roberson’s Fine Jewelry, a US-based jewellery retailing company.
But some see threat in rising gold prices which have dented jewellery demand in the US.
Many jewellery retailers have started lowering their inventory in anticipation of weak demand next year with elections due in the US.
“Rising gold prices have posed certainly a deterrent for jewellery sales in the US. With the Citi forecasting the bullion prices to hit $2,000 an oz by the end of calendar 2019, it will be disastrous for jewellery retailers,” said Gem Water, another US-based buyer.