The economic recovery in the US, the largest single market for gems and jewellery exports, has given a new lease of life to Indian diamond processors, who estimate a 25-30 per cent spurt in shipment during the largest sales season of the year - Christmas and New Year. The two coming occasions contribute about 40 per cent of annual jewellery sales.
Last year, jewellery sales to the US declined by 20 per cent on this occasion due to the economic crisis that started with the collapse of Lehman Brothers in September. Supported by huge stimulus packages for housing and automobile sectors, the US economy showed a surprising recovery at an annualised growth rate of 3.5 per cent between July and September this year.
The economic recovery is significant for Indian jewellers, as 30 per cent of their direct and 50 per cent of their indirect sales are to the US. Jewellers from India had started looking for alternative markets, including local ones and a fast-emerging Chinese market. But, they are finding hard to compensate the deficit of the US. According to Praveen Shankar Pandya, chairman of Diamond India Ltd and managing director of Revashankar Gems Ltd, Indian jewellers will turn to the US market again.
“Since the Christmas season is approaching fast, the recovery is good news for us, as despite lower sales, the US continues to contribute significantly to exporters’ turnover and no country can compensate the loss in the US market,” said Raju Jain, vice chairman of the Gems & Jewellery Export Promotion Council (GJEPC). Meanwhile, Gitanjali Gems, with 150 retail chains, has witnessed an over 20 per cent rise in sales in the past five days. The US market contributes between 15-20 per cent of Gitanjali’s turnover. Export orders which begin in August and continue till October-end for the Christmas season have surged over 25 per cent, according to industry sources. Generally, ready jewellery items are delivered within 45 days from the date of orders.