Summary
Precious metals and gemstones have been an integral part of the Indian civilisation since its recorded history. Gems and Jewellery (G&J) has been consumed by Indians for ages for both its aesthetic as well as investment value. India has the distinction of being the first country to introduce diamonds to the world. The country was also the first to mine, cut & polish and trade in diamonds.
The Indian G&J industry can be classified into various sub segments like diamonds, coloured stones, gold and silver jewellery, pearls, etc. However, the two major segments in India are gold and diamonds. India dominates the diamond processing trade with 11 out of 12 diamonds being cut and polished in India. India also dominates the gold and silver consumption globally with consumption of approximately 700 tonnes (gold) p.a. A major foreign exchange earner, the industry is also notable in providing employment to 1.5 mn people directly and indirectly.
The industry is characterised by a significantly large unorganised sector, labour-intensive operations, high working capital & raw material intensiveness, gold price volatility and export orientation. The demand for gold and diamond jewellery is driven by festivals, weddings and gifts, the increasing affluence of the middle class population and the increase in per capita spent on luxury items.
Though India plays a dominant role in the G&J industry in terms of processing and consumption, mining of gold and diamond is amongst the lowest in the world. India imports gold and rough diamonds along with other precious metals. Gold is purchased from countries like Switzerland, South Africa, Australia and UAE, and rough diamonds are sourced from Belgium, UK, Israel and UAE. There is an impact on the demand for gold given the record high price of gold in the last couple of years, but consumers have remained bullish on the precious metal and there is an increased investment-related demand for gold.
We expects organised retail to grow because of the changed buying preference of the increasing younger population through the introduction of hallmarking and certifications. Thekey drivers for growth in the industry are increasing disposable income, conscious marketing efforts, rising young population with the urge to spend on jewellery since it's regarded a fashion accessory. Indian G&J players are recognizing the importance of diversifying their business to emerging markets like China and the Middle East and not completely relying on the US as was the case before the financial crisis. However, it will be difficult to replace the US which is still the largest diamond market in the world. We now expect emerging market countries to be the engines of future growth for the diamond market as the demand from developed countries will remain subdued for some time to come.
Based on the gradual recovery in the global markets, We have investigated some of the leading indicators that signal a growing momentum in the Indian G&J sector. Factors like significantly lower inventory levels as compared to the period of financial crisis, a huge jump in export numbers, lower unemployment levels and stable rough diamond prices, all reveal a resurgence in the sector which was so critically impacted during the financial crisis when demand from developed countries plummeted.
For an in-depth analysis and our forecast of this sector, please refer to the exhaustive Report on the Indian Gems and Jewellery Industry.
Table of Contents
Executive Summary
01 Introduction
02 Evolution of the Industry
03 Outlook
Diamond Processing
Domestic Consumption
Changing trends in the Indian retail jewellery market
Concerns
04 Product Profile
Diamonds
Gold
Silver
Colour Stones
05 Industry Characteristics
Raw Material Intensive
Diamond & Gold
Labour Intensive
Working Capital Intensive
Export Oriented
Largely Unorganised Sector
Branding & Certification
06 Demand Supply Scenario
Demand
Demand Drivers
Supply
07 Export-Import
08 Cost Analysis
09 Capex Investments
10 Pricing Analysis
11 Duty Structure & Government Initiatives
Duty Structure
Government Initiatives
12 Analytical Model
SWOT Analysis
Porters Five Force Model
13 Company Overview
Gitanjali Gems Ltd.
Rajesh Exports Ltd.
Asian Star Co. Ltd
Suashish Diamonds Ltd.
Su-Raj Diamonds & Jewellery Ltd.
14 Annexure
World Gold Demand
Figures
Product Profile
Diamonds Features
Industry Characteristics
Comparative Costs of processing a diamond
Indian's Diamond & Jewellery export
Gold Jewellery fabrication
US Imports of Jewellery by source Region
Demand Supply Scenario
Global Jewellery sale
Global GJ value chain-2005
Share of Various Jewellery Segments
Key World market
Geographical segmentation-Gold-India (2009)
Geographical segmentation-Diamond-India (2009)
Increasing Disposable Income
Per Capita Spend on Luxury Items
Middle Class more diversified in expenses
Diamond Mining Countries (2008)
Gems & Jewellery export Basket
Top 10 gold producers by production-2009E
Top 10 gold producers by reserves
Export-Import
Gems and Jewellery Export Basket
Value addition by diamond processing industry
Cost Analysis
Cost Chart for Key Companies
Pricing Analysis
Polished Diamond Price Indexation
Gold Price and volatility chart
Gold Price trend in India
Silver Price in US$ Oz
Silver Price in Rs./Kg
Tables
Industry Characteristics
Rough diamonds import by value & carats in India
Country wise imports (rough) to India
Gold Imports by values & tonnes
Working Capital Cycle company wise
Working Capital industry average
Demand Supply Scenario
Gold Demand In India
Silver Demand in India
Total World Rough Diamond Production
Diamond production by the top diamond-mining companies
World Supply-Gold
Primary Mines Supply(Gold)
World Supply-Silver
Primary Mines supply (Silver)
Export-Import
Exports of Gems & Jewellery Statistics
Destination wise Export of Gems & Jewellery
Import of Raw material for Gems & Jewellery
Cost Analysis
Industry Averages net working capital cycle in days
Capex Investments
Investment Statistics
Project Details
Pricing Analysis
Diamond Pricing Review
Rounds price premium by size-D-H, IF-VS2 as on December 25, 2009 (in %)
