India’s gems and jewellery exports fall 16% to $2.48 billion in April

Exports of gems and jewellery from the country dropped 16 per cent to $2.48 billion in April 2014, the first month of the current fiscal, while exports of gold jewellery continued to grow for the third month in a row despite the curbs on gold imports and rising prices of gold.

For the financial year 2013-14 total earnings from export of gems and jewellery declined 11 per cent to $34.75 billion, compared to the last year's figures, according to data released by the Gems and Jewellery Export Promotion Council.

The council said the fall was due to stringent gold import policies implemented from July 2013, which had resulted in a virtual export halt for a few months.

Another reason was the 11-per cent fall in gold prices globally.

GJEPC estimates the share of gold in exports to have declined to 70 tonnes in 2012-13.

Exports of gold jewellery from the country grew 14.69 per cent to $604.42 million in April, extending the growth in overseas sales for the third month in a row, according to GJEPC.

India exported gold jewellery exports worth a total $527 million in April 2013.

Although the GJEPC attributed the decline in gems and jewellery exports to an increase in gold import duty to 10 per cent, the figures fail to substantiate the argument that gold import curbs are behind the fall in overall exports of gems and jewellery.

In fact, import curbs have not only left gold jewellery exports unhurt, but on the other hand helped it grow. The drop in exports was mainly due to lower sales of gems and non-gold jewellery.

However, the recent decision of the Reserve Bank to allow more banks to import gold has helped enhance the availability of gold and raw material for jewellery in the domestic market.

In March, the RBI had allowed more banks, including Axis Bank and Kotak Mahindra Bank, to import gold under the 80:20 scheme, a move seen as a precursor to easing restrictions on inward shipments of the metal.

For the financial year 2013-14 total earnings from export of cut and polished diamonds grew 12.65 per cent to $19.64 billion.

The industry also saw an increase of 11.98 percent in imports of rough diamonds at $16.72 billion indicating an increase in cutting, polishing and other manufacturing activities in India.

Export of gold jewellery and gold medallions during the period April-March 2013-14 was at $ 11045.92 million which showed a decline of 39.50 per cent.

This was mainly due to the non-availability of the gold limiting the extent of trade for many of the Indian players.

The average price for exported gold was lower than previous year adding to the woes of the industry that took a hit and closed at a negative of 11 per cent.

Export of coloured gemstones also dropped by 20.10 per cent to$ 519 million during the year. Silver jewellery exports saw a significant increase of 58.57 per cent to $460 million during the year.

Key exporting destinations for gems and jewellery in 2013-14 were UAE with 35 per cent of exports valued at $12.20 billion, followed by Hong Kong at 28 per cent with value of $9.79 billon and USA at 14 per cent, with export value of $4948.92.

"There has been a robust growth in the diamond sector. The market is bullish and the US and Europe markets have also improved. Although, there has been a decline by 11% in the overall performance, there are numerous opportunities for growth and improvement. We are looking at new ventures, new markets such as Middle East, Russia, China and various initiatives to promote the industry," Vipul Shah, chairman of GJEPC, said.

"The outlook for 2014-15 looks positive in the overall gems & jewellery exports in the current fiscal. The MoU being signed with Russian diamond mining firm ALROSA to share trade and statistical data between the two countries will help in strengthening trade relations between the two countries. Some of our other initiatives for the year 2014-15 include the India - China Gemstones Buyer - Seller Meet in Jaipur, India - USA buyer-seller meet to be hosted for the first time in Chicago, The 2nd edition of the global Gem & Jewellery Fair in Dubai this November and many more," he added.

"The prospects for 2014-15 looks bright for Jewellery, especially silver jewellry, as the 80- 20 scheme might get diluted, import duty is expected to be rationalized as the RBI has already allowed 4 more banks to operate in imported gold trading. There is also a huge demand in the international market, so we expect a boom in the silver jewellery exports with at least 10 % more exports compared to 2013-14," added vice chairman Pankaj Parekh.