Gems and jewellery exporters are betting on the demand during Christmas to help arrest the decline in jewellery exports. In the April-October period, exports rose only 3.5 per cent, against 6.5 per cent in April-September.
The decline largely resulted from uncertainty on presidential elections in the US, the largest market for Indian gold jewellery and diamonds.
“We expect exports to the US and other markets would start improving, as data from those regions show consumer confidence has improved. Owing to the third round of quantitative easing in the US announced in mid-September, consumer spends are rising,” said Vipul Shah, who recently took over as chairman of the Gems and Jewellery Export Promotion Council (GJEPC). Shah added so far, Christmas-related orders showed the trend of declining exports had been arrested.
A Capitaline analysis said, “Exports of gems and jewellery, which have been declining since six to eight months, are now expected to see a revival, considering the demand for diamonds ahead of the Christmas season in the US. However, the demand would not be very strong, due to slow economic recovery in that country and the debt crisis in Euro zone countries.”
“Within the export segment, players who hadn't hedged their forward foreign exchange revenues and those with an increasing share of high-margin jewellery exports have better prospects. Players focused on domestic demand would be boosted by the rise in demand for the ensuing marriage season,” it added.
Though the decline in exports of cut and polished diamonds continued in October, the year-on-year fall was lower than in the previous month, both in dollar and rupee terms, according to data released by GJEPC. And, the falling rupee has aided exporters. Cut & polished diamond exports stood at $1,339.26 million (49 per cent of total exports) in October, an annual fall of 28 per cent. In September these exports stood at $1,507.34 million, a 39 per cent annual fall.
A significant proportion of polished diamonds are exported to markets like the UAE, the US, Hong Kong and European countries. While gold jewellery is primarily exported to the UAE, the US, Singapore and Hong Kong, major export destinations for silver jewellery are the US, China, the UAE, Hong Kong and the UK. India imports gold and rough diamonds, along with other precious metals. Gold is bought from Switzerland, Australia, South Africa and the UAE, while rough diamonds are imported from Hong Kong, Belgium, Israel, the UAE, the UK and the US. Precious stones are procured from Thailand, Hong Kong, Zambia, Sri Lanka and Germany.