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Highlights of Commerce and Industry Minister Shri Anand Sharma at the inauguration of India International Jewellery Show in Mumbai on August 23, 2012.

Mumbai: August 23,2012

It gives me immense pleasure to be in the midst of a distinguished and discerning gathering of connoisseurs and customers of gems and jewellery for the inauguration of the 29th edition of the India International Jewellery Show (IIJS) in Mumbai. From a modest beginning two and a half decades back, the exhibition has witnessed a phenomenal growth in participation, becoming the 2nd largest jewellery show in Asia, the most sought after and comparable to the best internationally. IIJS has also acquired the reputation of being the most prominent sourcing show in India, evincing great participation from exhibiters, exporters, buyers and trade visitors. I am informed that the IIJS showcasing more than 800 exhibitors with 1800 stalls from across India and 5 country specific pavilions from Thailand, Dubai, Turkey, Belgium and Israel, is expected to attract 35,000 visitors from across India and 69 other countries of the world. It is the single largest platform for B2B engagements and offers a sparkling and glittering montage of India’s strides in the realm of gems and jewellery manufacturing, design and innovation, glorious display of the world of costume and fashion jewellery and a rich traditional repertoire of the craft.

 

The Gems and Jewellery Export Promotion Council- the main organizers of this Exhibition- deserve all encomiums for their seminal role in co scripting the success story of this event by its many trade facilitating, promotional and marketing activities that have enabled this largely fragmented and unorganized sector to find a common and universally recognized platform for dissemination of information, display of products and doing business. This iconic fair represents an amalgam of the ingenuity of handcraft, skill, technology, innovation and creativity of our brilliant minds truly making India the Global Jewellery Hub and world’s one stop destination for diamonds, gems, gold and jewellery. I am informed that the last IIJS generated business worth USD 1 billion. The enthusiasm this year will surely beget more. It is indeed in recognition of its potential and promise that it holds, that the IIJS has received support from the Ministry of Commerce and has been bestowed the status equivalent of an India Show.

 

Indian folklore from times immemorial has spoken of our country with pride as the colloquially famous home of the ‘sone ke chiriya’ and the much sought after Kohinoor diamond. No wonder then that the Gems and Jewellery Sector assumes a significant role being not only the largest single merchandise item of export, earning valuable foreign exchange but paradoxically the typical Indian allure of gold and precious gems and stones also makes it an important constituent of India’s import basket  and the 2nd largest contributor to India’s trade deficit.

The global market for Gems and Jewellery today is over USD 100 billion with jewellery manufacturing dominated by a handful of countries, namely- Italy, China, Thailand, USA and India. Growing at a CAGR of 13% the size of the Indian G&J industry is pegged at USD 36 billion. It accounts for 14% of the country’s total exports and contributes 19% to India’s total foreign exchange revenues. Such is the growing demand that it is believed every minute 44 pieces of Indian jewellery are sold through e commerce. Moreover, in a country with demographics heavily biased in favour of the youth, with 65% of India’s population being less than 35 years old, the Industry providing employment to 3 million artisans and workers, with potential of generating skilled employment for the teeming unemployed that will be added to India’s workforce, is expected to play a critical role in meeting the aspirational requirements of Young India.

 

Government in recognition of the inherent strengths of this sector in terms of its employability potential has leveraged it by undertaking establishment of Training Centres to enhance the skill base of the workers commensurate with the requirements of this industry. Two such Centres–the Domjur Project and the Khambat Project funded under the ASIDE Scheme are being set up in West Bengal and Gujarat, respectively.

 

We are supportive of the African producers in their quest for beneficiation with their diamond resources, while simultaneously encouraging them to do direct business with India. No wonder, GOI in partnership with GJEPC is also conducting training programmes in 6 African Countries of DR Congo, Guinea, Sierra Leone, Swaziland, Zimbabwe and CAR under the Technical Assistance Program for implementing the Kimberly Process Certification System. India is also setting up a India Africa Diamond Institute in Bostwana, on IDI Surat pattern, with GOI assistance of USD 2.7 million. Initiatives like these accord global acceptance to India’s manufacturing capabilities and expertise in this sector.

 

On the sourcing side, we welcome the end of KP deadlock for export of diamonds from Zimbabwe and we would as a signatory of the KPCS continue to play a proactive role in ensuring a fair and equitable trade in processing of rough diamonds. Sourcing of rough stones from Russia, Namibia and Zimbabwe and coloured gemstones from Brazil, Russia, Tanzania and Myanmar needs to be a key focus area within the confines of the bilateral institutional mechanism.

 

We are encouraging of global partnerships and collaborative ventures for adopting a diversified approach in the jewellery sector in building synergizes for training in skills, use of hi end technology, precision skills, for up gradation of production facilities for processing and designing, use of latest information technology tools for creating innovative designs through use of CAD. The premier National Institute of Design is pioneering the design initiative engaged as it is with the young Gen Next.

 

I am a strong votary of developing institutional linkages. On my recent visit to Antwerp World Diamond Centre on 24th June, 2012, I have proposed he need to synergize our efforts in the field of diamond and gem stone grading and sorting; research and development; certification; cutting and polishing; for setting up of state of the art laboratories in India and for training and graduation level courses in similar disciplines. Efforts are also on to enter into an MOU with Belgium for developing an institutionalized mechanism for sharing and reconciliation of data relating to trade in rough diamonds under the KPCS.

 

India’s global interactions in this field are shaped and influenced by enhanced economic integration with regional, multilateral and plurilateral markets, diversification from traditional markets into markets with hitherto untapped potential, economic engagement in the form of FTA’s in all its different varieties, incentives under the Foreign Trade Policy regime to facilitate personalised carriage, 24 hour trade and custom facilitation, lowering of transaction and transportation costs, making the Indian industry globally competitive. Increasing consumerism, changed clientele preferences aligned with technological strides, emergence of newer markets and different alloys within gold and non gold jewellery, new manufacturing techniques and advancements in fashion jewellery designs have changed the contours and dynamics of the industry.

 

The domestic Gems and Jewellery scenario is replete with centuries of rich cultural heritage of handcrafted jewellery bequeathed from one generation to the other as family heirlooms, together with the craft technique  being handed over from father to son in the typical guru shishya parampara. Possession of Gold and Silver is embedded in the socio-psychic mindscape as part of age old custom where abundance was indicative of one’s standing in the social hierarchy. Gold has been valued in India not just for its ornamental appeal but it also continues to be the second most attractive instrument of investment after bank deposits. The CRISIL Gold Index bears testimony to the flourishing commodity trade in paper gold. With consumer demands pegged at 24%, India tops the list of gold consuming countries, with gold moving from 3rd to 2nd place last year in India’s import basket, accounting for a quarter of the total global demand of nearly USD 20 billion. Gold jewellery even today accounts for 80% of the Indian jewellery industry which is perhaps of the size of USD 15-20 billion.

 

India has the rare distinction of being the first country to have introduced diamond to the world, therefore it is not surprising that while we may not be one of the largest producers of diamonds, 11 out of 12 cut and polished diamonds in the world pass through Indian hands, making India the world’s largest manufacturing centre of cut and polished diamonds, employing close to one million workers. Concentrated primarily in Mumbai, Surat and Jaipur, the polished diamond industry growing at the rate of 20%, accounts for 60% of the world’s supply of diamonds in value terms and 85% in terms of volume and 92% in terms of pieces. Having creating a niche market in small diamonds, India is now developing skills for cutting and polishing larger stones and experimenting with non traditional cuts, using the latest in laser and computer technologies, at par with its competitors in Israel and Belgium. Moreover, increasing consumerism and growing disposable incomes have made India the 3rd largest consumer of cut diamonds. The discovery of Bunder diamond mines in Madhya Pradesh by Rio Tinto could also have a significant impact on diamond mining in the future.

 

Although India is the global factory of cutting and polishing diamonds, the trading hubs are located in the bye lanes of Antwerp and Belgium where this trade is shared by Jews and Gujarati’s. The setting up of the Diamond Bourse in Mumbai –amongst the largest bourses in the world, at par with international standards is expected to ensure India’s strategic shift as a leading diamond trading market in Asia. However, India will still need to brace against the challenge it is facing from the emergence of cheaper diamond manufacturing centres in Cambodia, Vietnam and Indonesia.

 

Our Indian Traditions of Gemology have identified 84 precious and semi precious stones, however the Indian industry has traditionally concentrated on the Nav Ratna’s or the nine gems of India mainly Emeralds and later Tanzanites, besides Ruby, Saphire, Topaz, Diamond, Pearl and Coral. Of late Jaipur -where about 50 colour stone makers have formed a company called Color Stone Gems India- is emerging as one of the world hubs of coloured stones. The Indian coloured gem stone industry with exports worth USD 315 million in 2010-11 has expanded enormously. I am told Gemsfield- the world’s largest producer of coloured gems stones is setting up base in Mumbai and Jaipur and will source Zambian gems for the Asian market.

The development of the branded jewellery segment is still in its rudimentary stage, mainly because the traditional jewellery has been dominated by home grown retail enterprises or the concept of the family jeweller. The Indian family retail outlets approximating 2.5 million shops are mostly family run enterprises with next to nil global presence. The Hall Marking of jewellery introduced by the Bureau of Indian Standards to institutionalize global bench marking in quality assurance and to prevent against frauds will go a long way in building a reliable Brand India.  A few Indian jewellery brands like Tanishq and Gili are marking their global footprints, having entrenched themselves in the domestic market. Besides the growing presence and proliferation of hi end major global brands including Orra, D’Damas, Cartier in India borne on the wings of our policy of our foreign investment policy allowing foreign equity upto 51% in the single brand retail stores.

 

The Indian costume jewellery and accessories market is also in its nascent stage with India’s share a mere 53 million in a global market size of approximately USD 17 billion. However, given the large size of India’s consumer market estimated at 500 million and the upwardly mobile trends, the future projections for the G&J Industry are only expected to grow bigger and better with perhaps the branded jewellery sector expected to experience the fastest growth; diamond jewellery segment growing over 90% over the next five years and the gold jewellery sector witnessing 40% growth by 2015 with emphasis more on the non traditional areas. This sector will continue to deserve the thrust and focus as an important engine driving India’s export momentum and chartering the future course of India’s growth trajectory.

 

I am also conscious of the various demands of the G&J Industry to enable them to retain their global competitiveness as also their space in the export market. Some of these have already been addressed through the recent announcements in the Foreign Trade Policy- like opening of trade and custom facilitation for exports at ports and airports round the clock and allowance of exports of diamonds and gems and jewellery through personal carriage through Mumbai and Jaipur airports, the temporary discontinuation of which is being negotiated. As for your other concerns regarding re introduction of bonded warehouse facility for export of cut and polished diamonds, I am in full agreement with you and we are working towards resolution of the same. The amendments in the SEZ rules to incorporate suggestions which retain interest in the Scheme are currently under consideration. I have already written to FM for reconsideration on withdrawal of MAT. Access to cheap credit at interest rates comparable to those prevalent in competitive international markets has also engaged my attention especially in the wake a slowdown in the economy. I am confident that together in close partnership and with the cooperation of the industry we can script a new chapter in India’s growth story.

 

Once again, my heartiest congratulations to the Gems and Jewellery Export Promotion Council, supported by a network of 6000 plus members and to all organizers, participants, exporters and visitors for making the IIJS a much sought after annual event by evincing keen interest in it. The glittering display and the glitterati complement each other. I hope much business will be generated breaking last year’s record and am positive the fair will not only enhance the outreach of our sector to newer and remoter markets but also build permanent synergies which will infuse new dynamism and inspire new confidence in the sector. I assure you of the Governments support on issues of concern to you and for your future endeavours.

 

Thank You.

 

 

 
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