NAME-AKASH KHANDELWAL

SEMESTER-5TH

SECTION-B

ROLL NO-131

TERM PAPER TOPIC-GEMS AND JEWELLERY INDUSTRY IN INDIA

SUPERVISOR-DIPA MA·AM

INTRODUCTION Gems and jewellery form an integral part of Indian tradition. A legacy passed from one generation to another. The components of jewellery include not only traditional gold but also diamond, platinum accompanied by a variety of precious and semi-precious stones.The significance of the gems and Jewellery industry in the Indian economic scenario is a development of the last three or four decades. India is a leading player in the global gems and jewellery market. The gems and jewellery industry occupies an important position in the Indian economy. It is a leading foreign exchange earner, as well as one of the fastest growing industries in the country. The two major segments of the sector in India are gold jewellery and diamonds. Gold jewellery forms around 80 per cent of the Indian jewellery market, with the balance comprising fabricated studded jewellery that includes diamond studded as well as gemstone studded jewellery. A predominant portion of the gold jewellery manufactured in India is consumed in the domestic market. However, a major portion of the rough, uncut diamonds processed in India is exported, either in the form of polished diamonds or finished diamond jewellery. The largest consumer of gold worldwide, India is also the leading diamond cutting nation. The Indian gems and jewellery industry is competitive in the world market due to its low cost of production and the availability of skilled labour. In addition, the industry has set up a worldwide distribution network, of more than 3,000 offices for the promotion and marketing of Indian diamonds. The Indian diamond industry has the world's largest cutting and polishing industry, employing around 800,000 people (constituting 94 per cent of global workers) with more than 500 hi-tech laser machines. The industry is well supported by government policies and the banking sector with around 50 banks providing nearly $3 billion of credit to the Indian diamond industry. India is expected to have its diamond bourse functioning at Mumbai in 2006. India is therefore a significant player in the world gems and jewellery market both as a source of processed

diamonds as well as a large consuming market. . In 1966-67, the export turnover of the Gems & Jewellery industry was just Rs 220 m representing a 3 per cent of total merchandise exports. However, it has now grown to become one of the leading export oriented industries in India recording an export turnover of around Rs 91617.53 Crore during 2008-09, making it a significant foreign exchange . The sector is largely unorganised at present with a small but growing organised sector/The Indian gems and jewellery sector is largely unorganised at present. There are over 15,000 players across the country in the gold processing industry, of which only about 80 players have a turnover of over $4.15 million (Rs 200 million). There are about 450,000 goldsmiths spread throughout the country. India was one of the first countries to start making fine jewellery from minerals and metals and even today, most of the jewellery made in India is hand made. The industry is dominated by family jewellers, who constitute nearly 96 per cent of the market. Organised players such as Tata with its Tanishq brand, have, however, been growing steadily to carve a 4 percent market share. The India Brand Equity Foundation collates, publishes and disseminates well-researched and comprehensive information on the Indian economy and industry. We present excerpts from a report on the Indian Gems and Jewellery sector prepared by KPMG for IBEF REPORT. DIAMOND INDUSTRY Industry Flow Chart This section will conceptualize the basic journey of a diamond from exploration to a jeweler¶s shelf. Diamonds are truly a global industry. The diamond process begins in the mines of the Republic of the Congo, Sierra Leone, Angola, Canada, and South Africa, among many others. They are next sent to various places in the world to cut and polish. In most cases, nine out of ten diamonds are cut and polished in India (Manjee). Once the diamonds are beautified, they are sent to London, England where they are distributed and sold to the international markets and wholesalers. The majority of diamonds are likely to be sold in European or American markets.

operate and maintain a mine (Debeers) Categories of Diamond Mining Methods include: Open Pit. New York. The first stage is to seek out and find diamond deposits. Alluvial. construct. which is usually passed on from generation to generation. China and Thailand (Debeers). Sorting After mining the diamonds are sold to wholesalers who sort the diamonds according to the 16 000 individual categories of shape. Retail Diamonds that are sold as retail are a worldwide 50 Billion USD industry (Debeers) STAKEHOLDERS OF DIAMOND INDUSTRY . they are then made into jewelry in an infinite number of ways limited only by the creativity of the jewelry maker.The flow chart below identifies the scope of numerous economic and social responsibilities along the chain of a diamond: Diamond Process From Start To Finish Exploration Targeting and Review ?Discovery Processes ? Resources Development ? Handover (Debeers). Tel Aviv. Coastal and Marine. Mumbai. Underground. The rough diamond shape will determine how the diamond will be polished and cut. The final most expensive process is drilling Mining A large amount of capital investment is required to develop. Cutting and Polishing The cutting of the diamond takes a tremendous amount of skill. The largest cutting and trading centers are in Antwerp. carat. Jewelry After the Diamonds are sold. color (Debeers). size. A bourse is a term for a stock exchange usually in Europe. Johannesburg. After the diamonds are polished they are sold in one of the 24 diamond bourses worldwide (Debeers).

the stakeholders for the diamond industry are listed. In reality this may be highly improbable without foreign government intervention. this should always remain a goal of the miners. The social responsibility of customers is not to buy diamonds based on price alone. Additionally. The economic responsibility of governments is to collect proper tax and ensure fair trade practices.Below. This can be identified as their economic responsibility. The social responsibilities of miners is to. The social responsibilities of shareholders are to ensure that their money is being invested ethically. The economic responsibilities of miners are to produce value to their employer in terms of a reasonable profit. the creation of jobs and to ensure fair trade practices. . face poor working conditions. especially those in Africa. The social responsibility of governments is to inform society of any human rights abuses Shareholders The economic responsibilities of shareholders are to realize a profit from their investment. However. fair wages and rally for more valuable jobs in their respective countries. In most cases customers seek value for their purchases. demand proper working conditions. They should inquire the origin of the diamond to ensure that they are not inadvertently buying a blood diamond. Governments Governments have an interest in the fair treatment of workers. Customers Customers in the international markets who buy diamond jewelry have the right to be informed about the diamonds they buy. as well as their economic and social responsibilities: Miners Miners. they should ensure that they do not inadvertently support organization or countries that deal in unfair trade practices or human rights abuses. ideally.

Polishers The economic responsibilities of polishers are to add value to the product which is a rough diamond. Jewelers The economic responsibilities of jewelers is that they want brilliant stones for their designs and also a steady. among others. To do so. The social responsibilities of polishers to demand fair pay and working conditions. Celebrities Celebrities have the power to influence societies buying decisions. Suppliers The economic responsibilities of suppliers are to make sure their products are used in an environmentally and socially acceptable way. The social responsibilities of the press and media are to properly investigate claims made by both sides and write responsibly to help influence society. they are interested in preserving the continuity of their industry. The social responsibilities of jewelers are to demand that suppliers be able to certify where their diamonds have come from. stably priced. Press and Media The economic responsibilities of the press and media are to acquire newsworthy stories. and proper working conditions. The social responsibilities of management are to look out for the long term growth of their organization. This would include chemicals used in the mining process. Moreover. supply of diamonds to make their jewelry.Management The economic responsibilities of management workers in the diamond industry want to realize a return on investment for their spending. The economic . management would need to consider the stakeholders involved in their industry. The social responsibilities of suppliers are to provide only those diamonds with no conflict history. Another economic responsibility is a duty to report and inform the public at large. This is similar to the realities and demands that miners face.

it is hard for a new competitor to enter into the industry. Banks and Lenders The economic responsibilities of banks and lenders are to ensure that they get a good return on the money they invest. vertically integrated chain which makes it hard for an outsider to penetrate. This results in very little rivalry among competing firms. This also leads to difficulties for new competitors. Potential Entry of Substitute Products According the diamond marketers there are no substitutes for diamonds as a symbol of love and status. diamond mines are very capital intensive and are often in countries with unstable political environments. thus being able to sell more products. The diamond industry¶s dynamics of competition are shown by Porter¶s Five Forces Model: Rivalry Among Competing Firms The firms competing in the diamond industry are extremely strong and may even be considered monopolies. Diamond dealers and wholesalers work in a very close-knit. The fur industry has been suppressed from lack of celebrity support. . In fact there is more evidence of cooperation than there is rivalry. Therefore. Additionally. Environmental Groups The economic responsibilities of environmental groups are to work with resource based companies such as those in the diamond industry to come to a healthy balance. The social responsibilities of environmental groups are to protect the environment. anything else that can be made to hold similar value can break in the market. Potential Entry of New Competitors Even though raw diamonds are plentiful. This can be very effective.responsibilities of celebrities are to maintain their glamorous image so that they continue to be in high demand. This is a result of the fact that the diamond industry is primarily a protected cartel. The social responsibilities of celebrities are to not support industries that participate in human rights abuses. A diamond as jewelry has no value other than that created by the marketing and brand of the product.

seventy-fifth wedding anniversaries. Bargaining Power of Consumers Consumers have no physical need for diamonds as jewelry. . have almost total bargaining power.Bargaining Power of Suppliers Suppliers of the raw diamonds. They are able to control the supply and flow of diamonds and therefore manipulate their prices. such as DeBeers. et cetera. However. a strong association linked to the product for uses such as engagement rings.

Diamonds cut and polished in India are universally prized. and even at faceting colored diamonds. After India became independent in 1947. journey towards progress and development also began for the diamond industry.India has always been center stage in the dramatic history of some of the world`s most famous mesmerizing diamonds. Surat. for several years. and India has emerged as the largest diamond-cutting center in the world. the nation`s economy was in the depression. Diamond industry of the Indian market is mainly involved with cutting. Large exports directed to the establishment of factories. large-scale operation. There is a new generation of young designers dominating the world market. The Indian diamond industry was a scattered cottage industry only three decades ago. its craftsmen are equally skilled at cutting all shapes and sizes of stones. today India is precursor in the gem industry and a world leader in the manufacturing of cut and refined diamonds. .and large-sized diamond factories are well operational. Diamonds used in jewelry worldwide. The industry employs one million people. Mumbai. Today. India`s artisans along with their traditional skills dominated contemporary techniques to provide the world with jewelry that conformed to international standards. with state of the art laser machines. It is the newest methods in the manufacturing process that were employed. polishing and exporting diamonds. nine out of every ten come from India. In the world of jewelry industry. India has been the earliest known source of diamonds. Several views for business and commerce opened up as new policies came into place. Indian jewelry was made scrupulously by hand and was traditionally crafted by family jewelers skilled in a particular style. Today across India there are several jewelry design institutes. most of the medium. Bhavnagar and many small towns in Gujarat are the main polishing centres of the country. Conversely. Although India pioneered in the cutting of small diamonds yet today. There is an evident fact that the Indian jewelry designs have for centuries spell bounded everyone. this structured and rapid growth of the Indian diamond industry has a long-lasting impact. apart from a host of established houses that design the fashion jewelry. Ahmedabad. The Indian diamond industry today is a result of perseverance and hard work. mechanized. accounting for 95 per cent of the workforce of the world`s diamond industry. lathes and diamond-impregnated scaives. from the Indian maharajas to the monarchs of faraway lands. prepared with the latest modern machinery. The Indian exports of diamonds increased and in turn it reflected greater than before in the export of designed jewelry. Now it gradually evolved into a modern.

The Gem and Jewelry Export Promotion Council (GJEPC) is the zenith body of this dazzling and growing industry. In order to enable diamonds to be brought into the country to be sold. Types of diamonds The Diamond industry is essentially broken up into 3 segments: 1. often with special characteristics. 2. The unsold diamonds can then be exported without any duty or tax. Creating the Export Promotion Zones (EPZ) and Special Economic Zones (SEZ) in order to help and promote the export of gems and jewelry from the country is undoubtedly a new step for the betterment of the industry. Investment Diamonds high-quality large gemstones. diamonds have been found in many parts of the world The hardest natural substance on earth has caused controversy since it was first mined four thousand years ago. With extensive research and sourcing. Surat. and Amsterdam and the most important being Antwerp. Tel Aviv. Jewelry Diamonds rough diamonds cut for use as gemstones in jewelry. In 1966 the council was set up under the patronage of the Ministry of Commerce and has helped to form a better understanding between the diamond industry and the government. the government has legitimated the setting up of bonded warehouses. The Indian diamond industry is again at the doorstep of expansion. 3. purchased for investment. London. The Jewelry and Investment segments together represent 83 percent of the value of rough diamonds produced. The chief function of the council is to develop and promote the export of gems and jewelry from India and to contribute towards establishing a code of ethics to ensure that fair trade practices are followed in the jewelry arena. Industrial Diamonds natural and synthetic diamonds that are used in a wide range of manufacturing processes for their physical properties. The industry is controlled as a monopoly by the De Beers diamond company which operates from South Africa and London. The . The wholesale trade and cutting of diamonds is limited to only a few places in the world namely New York. Diamonds are views as symbols of status and love. The government is also constantly slackening its policies.encouraging fresh ideas and talent.

The significant challenge is that large amount of stakeholders over vast areas that are involved and have a stake in the diamond industry. By educating buyers and consumers about the processes of diamond production they may realize that they can have an effect in stopping the production of Conflict Diamonds. it should be noted that the Kimberly Process needs to improve so that there is a proper regulatory body to provide reliable monitoring. The Kimberly Process and media attention can help to educate consumers and buyers. There are various approaches managers might take to the strategic integration of economic. Managers are challenged to strategically integrate the economic. Evidence of Corporate Responsibility in the diamond industry can be seen with the second largest diamond producer in the world. The profits from these Conflict Diamonds fuel civil wars. However. the major issue for the diamond industry is Conflict Diamonds. the media has a means to effectively inform society by reporting and making films that shed light on the negative aspects of diamond production. The only way to lessen the effects of this strength is for consumers to be educated to make buying decisions based upon how well an organization fulfills their social responsibilities. Additionally. social and environmental responsibilities.diamond industry has been very successful to paint a positive picture when it is evident that the production of diamonds can be very detrimental to those involved in the production process regardless of where they are in the world. He has shown significant changes in the production of diamonds which have led to increased social and economic responsibilities of the diamond industry. they will have to take initiatives and invest in a Stakeholder Management Process. If the diamond industry had implemented the six steps Issues . The Issues Management Process should be used by managers to identify and plan for future crisis¶ that can evolve from stakeholders concerns. A competitive analysis using Porter¶s Five Forces shows the diamond industry producers to be exceptionally competitively strong. social and environmental responsibilities of the diamond industry. Lev Leviev. Conflict Diamonds cause human rights abuses such as deplorable working conditions and torture. In the past the major diamond cartels have ignored their stakeholders in favor of economic gain. This is a result of globalization or economic internationalization. As discussed throughout this paper. and possibly even terrorism. To implement a Stakeholder Management Process. management would need to identify and analyze stakeholders. In order for major diamond producers to gain or maintain a competitive advantage.

The diamond industry needs to recognize that is not a zero sum game. economic and social responsibility can be achieved simultaneously http://www.com/Diamond-Industry. Organizations in the diamond industry that do so will benefit in the long run by forcing its managers to adopt a stakeholder approach. huge stocking of inventory and thus handling costs and high working capital to be maintained. such as low levels of productivity as compared to places like China. with a view to analyse it s current status and the areas where it can correct or strengthen itself.Management Process.websitemba. If diamond companies invest in social responsibility and reporting. The Internal Environment: The internal environment analysis comprises of the evaluation of a company s strengths and weaknesses. lowest manufacturing and labour costs. and External Environment (opportunities and threats) to understand the present status of the company and use it as an aid in strategic planning. then they will help to ensure their long term continuity.php SWOT ANALYSIS SWOT Analysis of the Indian Diamond Industry: SWOT analysis is the overall evaluation of an industry s Internal Environment (strengths and weaknesses). The diamond industry should benchmark other natural resource industries that have been more successful in their stakeholder management. The External Environment: The analysis of the external environment is related to the opportunities and threats that the industry should be prepared for.000). The strong areas of the Indian Diamond Industry include the large workforce of skilled craftsmen (about 800. The process itself of conducting a benchmarking study sends a powerful message which can aid management in reform and action (Dwyer). Benchmarking is another useful tool that managers in the diamond industry may use. then it may have possibly identified that the production of Conflict Diamonds may lower the demand of diamonds. . a well-distributed marketing network and supportive governmental policies Weaknesses of the Indian Diamond Industry include areas where it can correct itself.

) which are much cheaper than the real diamonds. followed by UAE at 21 per cent. followed by China and Japan. . Sri Lanka and Thailand in the small-sized diamond segment. HPHT etc. as per the Gems and Jewellery Export Promotion Council (GJEPC). India is also emerging as the world s largest trading centre for gold targeting US$ 16 billion by 2010. In other words. 82 per cent carat share and 95 per cent share of the world market in terms of number of pieces. But now. India is on the verge of becoming the focal point of the global gems and jewellery industry. India consumes nearly 800 tonnes of gold that accounts for 20 per cent of world gold consumption. Á Total gems and jewellery exports from India stood at US$ 20. India is already the largest diamond cutting and polishing centre in the world²the Indian diamond cutting and polishing industry enjoys 60 per cent value share.88 billion for 2007-08.2 billion in 2006-07 to US$ 5. the marketing arm of the De Beers Group) and most importantly. the over dependence on single-channel suppliers such as the Diamond Trading Company (DTC. Á The United States and Hong Kong were the largest importers of gems and jewellery from India. a growth of 22. of which nearly 600 tonnes go into making jewellery.08 billion the previous year. Á India is the largest consumer of gold in the world. Á The domestic market for gems and jewellery is likely to increase to US$ 20 billion by 2010 and US$ 30 billion by 2015.27 per cent over US$ 17. Á Gold jewellery exports increased from US$ 5. the emergence of newer substitutes such as synthetic diamonds (cubic zircon.The opportunities the Indian diamond industry could utlise include the growing domestic demand for diamond jewellery and tapping potential newer markets in Europe and Latin America The threats facing the Indian Diamond Industry include the entry of countries such as China. with a share of 26 per cent each.6 billion 2007-08. nearly 9 out of 10 diamonds sold worldwide are cut and polished in India. thanks to positive government policies such as 100 per cent Foreign Direct Investment (FDI) in gems and jewellery through the automatic route.

Andhra Pradesh has gold and diamond bearing areas. garnet. Orissa has deposits of ruby and has about 20 varieties of various gemstones such as rhodoline.Branded jewellery is likely to be the fastest-growing segment in domestic sales. ruby and other gem stones. Á The Indian diamond jewellery industry is the third largest consumer of polished diamonds after USA and Japan. Mining India has significant reserves of gold. Á The Indian gems and jewellery industry has been gaining prominence as an international sourcing destination for high quality designer jewellery. India's strengths offer attractive opportunities across each of the elements of the value chain. as well as occurrences of semi-precious and abrasive stones spread over different districts. aquamarine etc. diamond. . Bihar and Andhra Pradesh. Madhya Pradesh. Á Indian industry has the best skilled manpower for designing and producing high volumes of exquisite jewellery at low labour costs. Chattisgarh. Diamond jewellery consumption is likely to jump to nearly 80 per cent in 2010 and over 95 per cent between 2010 and 2015.2 billion by 2010. Key States with gem stone reserves and mining potential are Maharashtra. Orissa. International stores such as Wal-Mart and JC Penney are increasingly procuring jewellery from India. IBEF REPORT The Indian gems and jewellery industry has significant potential India offers attractive opportunities across the industry value chain. The sector is expected to grow at 40 per cent annually to touch US$ 2.

cut and polish them as well as trade them.48 billion in 2004 compared to $840 million in 2003. India has also developed capabilities in machine-made jewellery. Value enhancement by the Indian diamond processing industry is the highest among other countries. with a value addition worth $1. South-East Asian countries. quality and cut. India offers the twin advantages of skilled labour and low cost in the area of gemstone processing. The share of gold jewellery in India's exports of gems and jewellery increased from 9 per cent in 1994 to 22 . In recent times. Today there is a ready availability of an entire range of diamonds in nearly every size. Jewellery manufacturing India has well-established capabilities in making hand-made jewellery in traditional as well as modern designs. Indian hand-made jewellery has always had a large ethnic demand in various countries with sizeable Indian immigrant populations such as the Middle East. the USA and Canada. Indian diamonds account 55 percent share in value terms 80 per cent share in cartage (weight) terms and 90 per cent share in volume terms. India's significance in the global gems and jewellery industry can be largely attributed to its strength in diamond processing.Recognizing the potential of the large unexplored gemstone reserves. Indian machine made jewellery is expected to generate demand from nonethnic jewellery markets as well. Gemstone processing India was the first country to introduce diamonds to the world .the first to mine. With imported or domestic processed studding. the Government of India as well as different state governments have been taking initiatives to open up the sector for exploration by global players. The cutting and polishing of diamonds and other precious stones is one of the oldest traditions in India and the country has earned a considerable reputation both in the domestic and international markets for its skills and creativity. In the global diamond market today.

Certification for quality diamonds and jewellery has given a fillip to exports and has resulted in greater acceptance of Indian products in the world market. Technology solutions are also available for production control. supply chain and inventory management in the jewellery industry. the Indian government has tightened its certification process for international trade. Many of India's jewellery manufacturing facilities are equipped with the latest CAD / CAM and other advanced design systems. professionally trained. technology driven designers. The central and various state governments in India have come out with policy incentives to promote jewellery manufacturing. In the area of diamonds. which are not accompanied by a Kimberley Process certificate launched in Switzerland. Indian jewellers have been focusing on moving up the value chain. powered by a new generation of young. Certification Following the World Diamond Council's statement on adopting credible and effective measures against the trade in conflict gems.per cent in 2004. The gems and jewellery industry in India is a good blend of modern manufacturing and design techniques with the traditional skills of the Indian artisan. from being polishers of rough diamonds to the manufacturing of jewellery. The government's Central Board of Excise and Customs has banned the import or export of rough diamond shipments. an indication of growing acceptance in the world market. Exports of Gold and diamond Jewellery are expected to increase in the future. The Gems & Jewellery Promotion Council is India's certification authority. The Indian industry is also compliant with international norms such as the Kimberly Process and . The Special Economic Zones and Gems and Jewellery Parks developed in various states offer technology-enabled environments that are conductive to growth and quality production. Technology The Indian gems and jewellery industry has made rapid strides in design.

the country's top gold importer.66 billion the first quarter of last fiscal. The current consumption of gold in India is estimated at over 900 tonnes. stated that the company is likely to import 200 tonnes of the precious metal in the current fiscal year. With well-established capabilities across the value chain. India is an attractive potential market in the gems and jewellery sector.7 tonnes of gold reserve as of June 2010. as per the World Gold Council. It has been until now. during the first quarter of 2010 (Jan-Mar) India was ranked as the strongest performing market on the back of increase in consumer demand. According to a release by the World Gold Council.36 billion (provisional). the undisputed single-largest Gold bullion consumer. Nearly 95 per . used mostly in 20 / 22 carat jewellery.the Patriot Act. Chairman and Managing Director.5 tonnes. as detailed below. The country registered an increase of 698 per cent to 193. The net imports of gold bars during April-June 2010 was estimated at US$ 11. Gold imports stood at 739 tonnes during April 2009-March 2010. as compared to US$ 16. MMTC Ltd . DIFF SEGMENT OF GEMS & JEWELLERY SECTOR The gems and jewellery sector in India has been growing across all key segments. According to Sanjiv Batra. Precious Metals Gold India is one of the largest bullion markets in the world. India stood at 11th position with 557. In the world official gold holdings ratings.

. India is also the third largest industrial user of silver in the world.000 outlets in the next 2-3 years. this Represents an area of potential growth in India. the number of outlets selling platinum jewellery increased from 12 in 2000-01 to over 300 currently. Gold consumption in India is primarily aimed at investment. Given the Global growth and the maturing of the Indian market to international trends. As per the Platinum Guild International (India).cent of gold is used to manufacture gold jewellery for the domestic markets and the remaining 5 per cent is exported. it continues to be less than one per cent in the global platinum jewellery market. It is predicted that the number of outlets selling platinum jewellery would increase to around 1. platinum jewellery has gained momentum in the past few years not only worldwide but also in India. Silver India annually consumes around 4. targeted at the premium jewellery segment. Silver jewellery and other articles for personal use. account for the bulk of the sales especially in the rural areas. Platinum Platinum or white gold. While India's share in the Global platinum jewellery market is growing by 19 per cent annually. Due to the increasing gold prices.000 tonnes of silver. is gaining Preference among designers and consumers globally. Gemstones Due to the popularity of gemstone studded jewellery across the globe. after the US and Japan. Most platinum jewellery manufacturers are targeting consumers in the age group 20-40 years with high disposable income.

The industry body further stated that the Government is also working towards formulating an international compliance code for manufacturing costume jewellery. reliability and wearability factors. of which India only exports around US$ 53 million. and has positioned itself on the quality.0. The current global costume jewellery and accessories market is estimated at US$ 16. It is second only to the US market of $ 40 billion and is followed by China at $11 billion.India's gemstone industry has been growing with an estimated turnover of $0. as per the Export Promotion Council for Handicrafts. with a market Size of $13 billion. providing a huge opportunity area for the Indian costume manufacturers. Jewellery The Indian jewellery market is one of the largest in the world. The branded jewellery market in India is estimated at $111. The gold jewellery market is growing at 15 per cent per annum and the diamond jewellery market at 27 per cent per annum.26 billion. Trends also show that traditional handcrafted jewellery is slowly giving way to machine made jewellery.6 million per annum. Branded jewellery is a relatively new concept in the sector. The emergence of branded jewellery is a new trend that is shaping the Indian Jewellery market. thereby. Government Initiatives .22 .3 billion. Costume Jewellery The Indian costume jewellery market is also witnessing growth in the international market.

whose curriculum includes. the government has formulated new rules for faster clearance of import and export consignments of specific goods including jewellery and gems. THE govt of india took several initiative to stimulate growth given the industry·s critical importance in indian exports. jewellery design.In order to open a new avenue for the bullion trader community with improved trading practices and increased delivery centres. The committee appointed to study India's National Design Policy is likely to recommend the setting up of four additional National Institutes of Design (NIDs). among other disciplines. This include duty free import of rough diamonds and waiver of custom duty on coloured rough gemstones and semi processed. It has also made the import of polished diamonds completely duty free. The EXIM policy for 2002-2007 focused on exports of gems and jewellery through market access initiative . the recent strategic tie-up between Bombay Bullion Association (BBA) and Indian Commodity Exchange Ltd (ICEX) has opened an avenue to harness the huge investment potential lying with the small and the unorganised players. the government has incorporated some other measures like providing interest subvention of 2 per cent to labour intensive export sectors and duty drawback facilities. This will facilitate the sector towards evolving from being just a manufacturing centerer to becoming a global trading hub for diamonds. BBA will be an important stake holder in exchange's efforts in strengthening the delivery infrastructure and also in launching customised contracts suited to requirements of Indian markets. In a move to boost the industry. jointly deepens the markets in order to encourage wider participation. along the lines of the existing Ahmadabad-based NID. Furthermore. by providing multiple delivery centres across the country by leveraging on MMTC's and BBA's pan-India network. It further. It further offers membership to all the BBA members. 2008. half cut and process diamonds. in order to promote gems and jewellery export From January 1.

6 per cent . registering 67. There was a reduction of import tariff on cut and polished diamonds and gemstones from 15% to 5% which enable indian jewellers to import expensive. duty free imports and adjustment in value addition norms.3 billion in the corresponding period last year. large-sized diamonds and export them after value addition through the manufacture of studded jewellery. INITIATIVES BY GOVT OF GUJARAT (A) Cluster development scheme1) 25% contribution to the project proposal for training programmes 2) Contribution of 25 ² 50% of the cost component of the proposal in other Matters (B) Financial assistance to industrial parks Industrial Park Provision for the location of minimum 30 industrial / service units ² 20% of Fixed capital investment upto maximum of INR 100 lacs Mini Industrial Park (Minimum 11 units) 25% of fixed capital investment upto a maximum of INR 100 lacs Exports Exports rose to US$ 8.89 billion during April-June 2010 from US$ 5.schemes.

The countryspecific trade centre of India.88 million reflecting a growth of 5. The Gems and Jewellery Export Promotion Council (GJEPC) is looking at exploring new markets.2 billion.growth in the total gem and jewellery exports. The rough diamond exports stood at US$ 247.94 million whereas the cut and polished diamond exports posted a growth of 85. During June 2010.6per cent as compared to US$ 437. The long term prospects looks good with jewellery exports expected to touch $16 billion in 2010 according to industry estimates. US$ 23. The industry also plans to make India a trading centre for cut and polished diamonds.9 billion worth of exports during the first quarter of 201011.22 per cent in April-June 2010 as compared to US$ 57. will start functioning in Sharjah from October 2010. In June 2010 itself. such as Latin American countries.94 million worth of coloured gemstones were exported.86 million during the same period last year. the India Trade and Exhibition Centre (ITEC). cut and polished diamond exports stood at US$ 2. The figures for export of gold jewellery in June 2010stood at US$ 610. and is closely working with the government of India in this regard. ITEC will be a one-stop-shop for Indian businessmen and small and medium . Future Outlook The future of the industry is quite promising.37 per cent with US$ 5.40 million representing a growth of 39.24 million in June 2009. as per data released by the Gem and Jewellery Export Promotion Council (GJEPC). The export of coloured gemstones stood at US$ 60. More and more buyers across the world are turning to India as their preferred source for quality jewellery.

000 Diamond units located in and around Surat Surat is referred to as the ´Silky City Sparkling with Diamondsµ The State is home to several Centers of Excellence such as the Indian Diamond Institute. Gulf Cooperation Council (GCC) nations.enterprises (SMEs). The exhibitors who will showcase their products in these exhibitions will be organised through the export promotion council. which offer courses related to the Gems & Jewellery Industry . constituting 80% of India·s total diamond exports 90% of total diamonds in Gujarat are processed by about 10. which will assist them to explore potential markets and opportunities in the UAE. The Gems and Jewellery Export Promotion Council has initiated IIJS Signature to promote India as the preferred source for jewellery and eventually build Brand India. the Middle East and North African region. Signature was conceptualised to showcase India's ability to produce quality jewellery that will match the lifestyle trends world ov Important facts Gujarat accounts for 72% of the world·s share of processed diamonds and 80% of total diamonds processed in India Almost 8 out of 10 diamonds in the world today are processed in Gujarat Diamonds processed in Gujarat were estimated to be worth USD 9000 million (2004-05). ITEC will organise exhibitions every month till June next year with focus on gems and jewellery being showcased in April 2011.

Ahmedabad VG Gold Assaying & Rajkot Hallmarking Centre Indian Diamond Institute Surat Gujarat Gold Centre Vadodara Kesar Hallmarking Centre Ahmedabad Gujarat Gold Centre Ahmedabad VALUE ANALYSIS Jeweller GEMSTONE PROCESSING JEWELLERY MANUFACTURING JEWELLERY RETAILING . Ahmedabad and Rajkot are the major gems & jewellery clusters Rajkot is internationally known for its unique hand made gold and Silver ornaments which constitute 85% of the total jewellery Assaying & Hallmarking Centers in Gujarat Surat Rajkot Vadodara Ahmedabad Gems & Jewellery Clusters Ahmedabad Hallmarking Center Parkar Gold Ahmedabad National Center for Hallmarking Surat MMTC Ltd.Surat.

DIAMOND. emeralds. the Company is based in Surat. and its business includes diamond processing They manufacture a wide array of diamonds including round brilliants. POLISHING DESIGN AND FABRICATION STUDDED JEWELLERY Leading Industry Players SANGHAVI EXPORTS The group·s core business is the export of polished diamonds & diamond studded jewellery and manufacture of diamonds & jewellery The group has a large network of marketing offices spanning across USA. pears. Hong Kong. Sanghavi Diamond Manufacturing at Surat. radiants. Japan. Sanghavi Exports has a hi-tech diamond manufacturing factory. D to K colours and IF to 13 purities . and marquises.50 cents to 5 carats and above. CUTTING. Australia. Canada & Singapore. ovals. which is one of the largest units in Asia. The group manufactures polished diamonds and diamond jewellery VENUS JEWEL Founded in 1969. GEMSTONE. GOLD PLATINIUM. Belgium. ranging from 0.

gold jewellery & loose diamonds KARP The group manufactures polished diamonds and diamond jewellery Karp·s diamond manufacturing facility is located at Surat SMALL INDUSTRY CLUSTERS REGION Valsad Khambhat Rajkot Navsari Bhavnagar GEMS & JEWELLERY CLUSTER Jewellery Gemstone (Agate) Gold & Silver Jewellery Diamond processing Diamond processing .In 1996. Venus Jewels developed a grading system ² the Venus Grading System based on Standardization in grading and rational price structure Pioneered the concept of online stock for increasing sales FOREVER DIAMONDS Key manufacturer and exporter of diamond jewellery The Company·s products include diamond jewellery.

Schurter Electronics. Medical Centre. quilts.). Chemicals. Gem Star Co. Common Effluent Treatment Plants (CETPs) Jewellery Training Institute in the premises 140 residential dwelling units. Zaveri Exports. Garments. Ginza Industries. etc. IT Hardware. Pharmaceuticals.. bed sheets.Palanpur Surat Ahmedabad Diamond processing Diamond processing. Himson International. Tobacco Availability of Infrastructure-: Support Infrastructure such as power. Royal Home Textiles etc. Diamonds. Major Industries Textiles. Recreational facilities . Jewellery Diamond processing. Engineering Goods. Made ups (pillows. Gems & Jewellery. Ltd. School. Pvt. Surat Major clients Adani Exports. KK Jewels. Gold & Silver jewellery SPECIAL ECONOMIC ZONES Developer 1-:) Diamond and Gem Development Corporation Sachin. water. drainage.

Connectivity Nearest NH/SH: National Highway 8 (13 km). Gandhinagar National Institute of Design (NID).Surat State Highway (3 km) Nearest Rail Head ² Sachin (1 km) Surat Airport ² 15 km Nearest Port (JNPT) . Recreational Facility. Surat National Institute of Fashion Technology (NIFT).260 km 2--) Gems & Jewellery SEZ Gujarat Hira Bourse Ichhapore. Health Club. 6 (Extension) . Navsari. Creche etc. EDUCATIONAL INFRASTRUCTURE Major institutions offering courses specific to Gems & Jewellery Indian Diamond Institute (IDI). SH ONGC ² Magdalla Nearest Rail Head ² Surat (18 km). 8 km from Surat Airport Other Provisions availableTraining facilities for skilled manpower. Ahmadabad . Surat Surat Co Connectivity- Nearest NH/SH: NH No. Medical Facility.

POTENTIAL India have several well recognized strengths which have made it a significant force in the global Gems & jewellery business.Graduate and Diploma Level programmes offered by Indian Diamond Institute include Diamond Sorting and Grading Gemology Jewellery Designing.S. India is the largest diamond cutting and polishing centerer in the world India is the 3rd largest consumer of polished diamonds after U.5 billion dollar worth of gems and jewellery India is the largest consumer of Gold jewellery in the world and accounts for 20% of world consumption. The main salient potential of the India Gems and Jewellery market are as follows-: 1) Highly skilled yet low cost labour . Manufacturing and Appraising Jewellery Business Management Gem Diamond Identification and Grading INDIA GEMS AND JEWELLERY INDUSTRY OVERVIEW India has a very large market for Gems and Jewellery sales of over 10 million dollar.A & Japan. with domestic India nearly occupies about 4% of total global gems & jewellery market India exports nearly 15.

Expected to grow at 40% p. y y y Branded jewellery likely to be the fastest-growing segment in domestic sales.2) Established manufacturing excellence in jewellery and diamond polishing. . to $2. 7) Opportunity to address one of the worlds largest and fastest growing Gems and jewellery markets 8) Opportunity to leverage Indian strength to leverage the global market. yet low-cost labour. India is the fastest-growing jewellery market in the world. Exports expected to grow from $15. 3) India is the most technologically advanced diamond cutting center in the world.2 billion by 2010.a.5 billion in 2005 to over $25 billion by 2010 The Indian Gems & Jewellery industry is highly fragmented with a large number of domestic private sector companies. 5) Established manufacturing excellence in jewellery and diamond polishing. 4) It Highly skilled. 6 )India is the most technologically advanced diamond cutting center in the world.

Retail sector The Indian gems and jewellery market continues to be dominated by the unorganised sector. 54 million . However. Adora boasts of about 65 outlets in 35 cities. It is the jewelry of Titan Industries Ltd. It even won the Best showroom in DTC Diamond Season 2005-2006. Not surprising then. Lata Mangeshkar. Kiah stands for µbeautiful place .y y y A large portion of the market is in the unorganized sector. The World Gold Council recently estimated the size of India s gold coin market at about US$ 2. the coins business would see revenues of about US$ 63. the brand name. Moreover. y Tanishq is one of the most popular diamond jewelry brands in India and is known for its innovative designs. There are over 2. Top Diamond Brands in India Branded Jewelry has transformed the Indian jewelry market significantly and hopes to do well in future too. the jewellery and watches market is pegged at about US$ 13. According to Ajay Mitra. touching US$ 23. JC Penney etc. attracting both global and domestic players to this sector. The brand is themed on love and celebration of life and is trusted by many celebrities. Celebrating womanhood. India is gaining prominence as an international sourcing destination for high quality designer jewellery. According to an ASSOCHAM report. according to a report released by Technopak Advisors on the Changing Retail Landscape in India. .2 billion by 2010 according to a McKinsey report. It was launched in 1995 and boasts of 84 outlets in 61 cities. Plus Indians love for jewellery ensures that the gems and jewellery market continues to be lucrative. An exclusive collectionSwaranjali was designed for the admirers of the legendary singer as well for all music lovers. branded jewellery is becoming very popular and the market for branded jewellery is likely to be worth US$ 2. which was launched by a Mumbai based Jewelry Corporation.70 billion. Walmart.11 billion.5 million jewellery shops in India and most of them are family run.90 million over the next six months on sales of about 75-76 tonnes. retail of jewellery is becoming organised. which is promoted by the TATA group. managing director of the World Gold Council s India office. the increasing purchasing power parity of the middle class and surging income levels have resulted in an increase in the consumption of gems and jewellery by around 11 per cent in the five year period preceding 2006-07. It was launched by Sheetal manufacturing company in October 2004. the government allows 51 per cent FDI in single brand retail outlets. procure jewellery from India. It is expected to register a 12 per cent growth by 2012. light weight and yet striking.US$ 105. Some of the top diamond brands in India include: y Adora is as diamond jewelry brand. With an increasing number of jewellery houses entering the branded jewellery sector. with the Indian consumer becoming more aware and quality conscious. The list includes µthe Nightingale of India . Tanishq introduced the µcollections strategy in jewelry. y Kiah is another brand which is deemed stylish.60 billion.

To prove its authenticity. It forms a part of the Gitanjali Digico Group and was founded in 1966. modern and independent women. Implementing the state of the art technology. The brand offers world class cutting and polishing facilities at five locations in the country COSPI GEMS AND JEWELLERY COMPANIES INDEX YEAR 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 NO OF COMPANIES 8 8 13 14 24 8 3 8 14 8 6 7 . the collection is targeted at fashion conscious. Nirvana even offered lifetime warranty to its customers.y Nirvana Diamonds were launched in in 1987. y D'damas is one of the oldest diamond houses of India.

com/info/gem_and_jewellery_industry_overview http://www..google.html www.indiabizclub.com/doc/36078832/Diamond-Retailers .business-standard.iloveindia./gems-jewellery-industry./on www../gemsjewellery-industry..co.aspx?in=25&art_id=26735&cat_id=439&page=2 .com/trade-shows/gems-jewellery/index.com/india/.ibef.. http://books..org/artdispview.html IBEF REPORT http://www.economywatch.in/books?id=soSAme16NsMC&pg=PA89&dq=tradition+g ems+and+jewellery&hl=en&ei=5XCxTOjtOZC2vQOfrpjwBg&sa=X&oi=book_res ult&ct=result&resnum=6&ved=0CE8Q6AEwBQ#v=onepage&q=tradition%20ge ms%20and%20jewellery&f=false www.2004 2005 2006 2007 2008 2009 BIBLIOGRAPHY 13 17 21 19 19 19 http://jewellery.scribd..com/.

com/doc/13925863/Swot-Analysis-on-Diamond-CuttingIndustries DATA ANALYSIS 1.scribd.593596(production) In the above equation b= 5088998 and a= 0.1+1. production is the dependent variable (y) and export quantity is the independent variable (x).http://www. The following regression equation is constructed Export quantity = y=1.593596+11119.003155992 The hypothesis test with the regression equation is as follows .

6 and b=1.8E-05) and the value is less than 0.511521 The hypothesis test with the regression equation is as follows H01.IMPORT QUANTITY does not have a significant effect on the PRODUCTION of the GEMS AND JEWELLERY in India.This means that 86% of the production is influence by the export quantity The p-value is small (p-value = 3.861162. production is the dependent variable (y) and export value is the independent variable(x) The following regression equation is constructed Production (y) = 19977.862472.EXPORT QUANTITY does have a significant effect on the PRODUCTION of the GEMS AND JEWELLERY in India.341525 The hypothesis test with the regression equation is as follows H01.64E-05) and the value is less than 0.05 and hence we may reject the null hypothesis and should accept the alternative hypothesis. .511521 * import quantity (x) In the above equation a120550. production is the dependent variable (y) and import quantity is the independent variable(x) Production (y) = 120550.This means that 86% of the production is influence by the export value The p-value is small (p-value = 3. H11.3 + 0.341525 * export value (x) In the above equation a=19977. .EXPORT VALUE does have a significant effect on the PRODUCTION of the GEMS AND JEWELLERY in India. At 95% confidence level the R value is 0.H01. H11. H11.EXPORT QUANTITY does not have a significant effect on the PRODUCTION of the GEMS AND JEWELLERY in India. At 95% confidence level the R2 value is 0.EXPORT VALUE does not have a significant effect on the PRODUCTION of the GEMS AND JEWELLERY in India.IMPORT QUANTITY does have a significant effect on the PRODUCTION of the GEMS AND JEWELLERY in India.3 =and b=0.6 + 1.05 and hence we may reject the null hypothesis and should accept the alternative hypothesis 2 3. 2.

production is the dependent variable (y) and sales value is the independent variable(x) Production (y) = 5000 + 5.05 and hence we may reject the null hypothesis and should accept the alternative hypothesis 2 5. H11.This means that 96% of the production is influence by the import quantity The p-value is small (p-value = 7.2 and b=1.98E-05) and the value is less than 0.573373* import value (x) In the above equation a=15556.SALES VALUE does have a significant effect on the PRODUCTION of the GEMS AND JEWELLERY in India. At 95% confidence level the R value is 0.573373 The hypothesis test with the regression equation is as follows H01.05 and hence we may reject the null hypothesis and should accept the alternative hypothesis 4. H11.IMPORT VALUE does have a significant effect on the PRODUCTION of the GEMS AND JEWELLERY in India.507169* sales value(x) In the above equation a=5000 and b=5.05 and hence we may reject the null hypothesis and should accept the alternative hypothesis 2 . At 95% confidence level the R value is 0.51E-08) and the value is less than 0.964852. .000125) and the value is less than 0.507169 The hypothesis test with the regression equation is as follows H01.SALES VALUE does not have a significant effect on the PRODUCTION of the GEMS AND JEWELLERY in India.This means that 84% of the production is influence by the sales value The p-value is small (p-value = 5.At 95% confidence level the R value is 0.819988. production is the dependent variable (y) and import value is the independent variable(x) Production (y) = 15556.IMPORT VALUE does not have a significant effect on the PRODUCTION of the GEMS AND 2 JEWELLERY in India.2+ 1.This means that 81% of the production is influence by the import value The p-value is small (p-value = 0.846743.

HYPOTHESIS .

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