Gem exporters head to CIS

Plan to tap 10 per cent of the $7 billion market in 3 years

Amid declining exports of gems and jewellery, the exporters have zeroed in on Commonwealth of Independent States (CIS), the regions of the erstwhile USSR, to boost their trade.

The Gem and Jewellery Export Promotion Council (GJEPC) has drawn up plans to tap 10 per cent of the CIS market in the next 3 years.

The GJEPC, which led a delegation to the CIS countries recently, has lined up a mix of initiatives, including investment in private mines there, exporting semi-finished and finished gems and setting up manufacturing units.

The gem and jewellery market in the CIS, along with Russia, is estimated at about $7 billion, with Ukraine providing the maximum growth potential.

India's exports of gems and jewellery declined by 2.5 per cent in rupee terms at Rs 28,951.20 crore and 6.89 per cent in dollar term at $6,356.17 million in the first five months of the current financial year as compared to Rs 29,670.45 crore ($6,826.72 million) in the same period last year.

"The CIS countries have been consuming Indian-made jewellery by importing it from Dubai, Turkey and Italy. Indian jewellers can tap this market by directly exporting to these countries," said Sanjay Kothari, convenor, promotion, marketing and business development, GJEPC.

GJEPC recently led an eight-member delegation to CIS countries, including Armenia, Georgia, Azerbaijan, Ukraine and Kazakhstan, with the main aim to explore the potential of jewellery exports.

"The potential in these countries is immense, as jewellers are using outdated machinery and technology. Besides, their designs are traditional. We can introduce latest technology and designs," Kothari added.

The existing private mines in CIS countries are starved of investment. Indian jewellers can invest in them and source raw gems, rough diamonds and silver for their jewellery, noted Kothari.

The CIS countries also offer strategic geographical and financial advantages to the domestic jewellers. Setting up manufacturing units there help to better tap the local markets.

Besides, exports to the USA and Europe from the CIS countries become profitable, given the geographical proximity and import duty advantage. The duty on imports of gems and jewellery to the USA from the CIS countries is lower when compared to the import duty from India, Kothari pointed out.

The CIS market has a huge potential in lifting the declining gem and jewellery exports. Cut and polished diamond exports slumped by 12.95 per cent in rupee terms to Rs 19,033.70 crore (Rs 21,864.76 crore) in the first five months of the current financial year.

The decline in dollar terms was by 16.92 per cent at $4,179.65 million ($5,030.81 million) during the same period. In volume terms too, cut and polished diamond exports fell sharply to 140.48 lakh carat from 194.28 lakh carat.

Exports of rough diamond, however, went marginally up in volume terms to 153.836 lakh carat from 150.83 lakh carat. While in value terms, their exports slumped by 7.85 per cent to Rs 966.29 crore (Rs 1,048.59 crore) and 12.01 per cent in dollar terms to $212.16 million ($241.12 million).

The exports of coloured gemstones shot up by 8.92 per cent at Rs 414.05 crore (Rs 380.16 crore), while gold jewellery exports surged by 34.86 per cent at Rs 8,239.93 crore (Rs 6110.14 crore).