China top jewellery importer in FY08

The US, traditionally the largest export destination for India's gems and jewellery industry, has given way to China for the top spot.

The ongoing recessionery indications in the world's largest economy has stagnated the purchasing power of US consumers.

Consequently, Indian exporters have lowered the purity of gold content in gold and diamond-studded jewellery in order to maintain the pricing.

The rampaging economy of the Indian neighbour has improved the financial well-being of consumers, resulting into higher gem and jewellery consumption.

India's exports to the US slumped to 26 per cent during 2007-08 from 35 per cent in the previous year while the shipment to Hong Kong jumped to 26 per cent from 15 per cent last year thanks to the burgeoning Chinese market.

Sanjay Kothari, chairman, Gems & Jewellery Exports Promotion Council (GJEPC), attributed the slump in the exports to the US to a number of factors, including high gold price, depreciating US dollar, economic recession and huge appreciation in rough diamond prices.

The sudden fall in exports to the US can also partly be attributed to the withdrawal of generalised system of preferences (GSP). The GSP, which provided the benefits of duty-free jewellery imports to underprivileged countries, including Bangladesh, which was withdrawn on July 1, 2007.

Exploring the opportunity in the land of the dragon, Indian jewellery manufacturers, such as Suashish Diamonds, Gitanjali Gems and Shrenuj & Company, have announced huge investment plans in China.