The Indian jewellery industry is sometimes one of the easily overlooked one though, this particular industry contributes to 6-7% of the country’s annual GDP. Surprising eh? Well not really, it is one of the fastest growing sectors that is labour intensive and export oriented.
Interestingly, it has been an important part of the Indian tradition too and has gone through many changes in the past few years, some good some bad, but the industry has managed to survive well so far.
If you take a look at Indian mythology and how the characters are symbolized, you’ll see the prominence of jewellery. It continued through the medieval times where Kings, Queens, Princes, Princesses and Nawabs all adorned and endorsed it with abundance. In modern times though, the adorning has drastically reduced, however, the appeal of jewellery hasn’t been lost. It still retains the same value in terms of weddings and important functions, and also for investment purposes.
India is the second largest consumer of gold in the world, this fact in itself goes a long way to show how obsessed Indians are with their jewellery. Though most of the jewellery is resting inside a bank locker. There are many reasons for this, first being that it’s impractical to wear heavy gold and diamond jewellery every day, plus with changing fashion tastes the heavy jewellery doesn’t match with the clothes women prefer today, and in many cases, as mentioned, many people buy jewellery as an investment.
As we move forward in 2016, here are some of the trends and challenges that have been noticed and forecasted for the Indian jewellery industry:
- Ethical sourcing of materials: One of the primary concerns of the jewellery industry worldwide has been sourcing of materials in an ethical manner. This will thankfully have effects in the Indian jewellery industry too where it has been a plaguing question. Ethically sourced looks will become a priority.
- Diamonds aren’t Forever? The Diamond industry will continue being volatile: 2015 was a tough year for the Indian diamond industry that saw 25, 000 people lose their jobs which in turn gave rise to crime and unethical practices. The leading diamond company, De Beers had recently stated that things are not going to looking up any time soon for this industry. Last year around, 350 diamond units had closed down in the world’s largest diamond cutting and polishing hub. The diamond giant is also planning to infuse some funds into India to promote diamonds in India through a marketing campaign.
- PAN card requirement for transaction above Rs 2 lakhs: This rule introduced by the government since January 1, 2016, has been hampering business. Ahead of the budget, in a meeting with Finance Minister Arun Jaitley, two of the industry bodies, All India Gems & Jewellery Trade Federation (GJF) Gems and Jewellery Export Council (GJEPC) spoke about the issue of PAN card requirement for transaction of above Rs 2 lakh. This has been hurting the domestic industry and the two bodies have requested the government to raise the transaction limit to Rs 5 lakhs. Reports say that because of this new requirement, the local jewellery industry has lost around 25-30% business in the first fortnight of January.
- eCommerce: While brands like Caratlane and Bluestone have been doing exclusive retailing of diamond and gold jewellery online, eCommerce platforms like Amazon and Flipkart have also joined them. But, selling jewellery through a website or an app still remains a challenge here unlike in countries like the US and China where business is high in eCommerce platforms. Online sales account for less than 0.2% of jewellery sales in the country. Online precious jewellery sellers have struggled because majority Indians prefer buying gold from trusted family jewelers though companies are hoping that will see a change in the coming years.
It will take a lot of push and encouragement from the Government before the Indian jewellery industry is back to doing brisk business, especially the online platforms. Bigger brands will continue to dominate since they have the brand and monetary power to increase brand awareness as the local businesses continue to suffer. The Government should take initiatives to protect the smaller businesses.
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