Gold jewellery sector needs to focus more on exports: Icra

Domestic gold jewellery sector would have to focus more on exports to the US and other foreign markets for better growth prospects, said a report by Icra. The study said that though domestic consumption increased in 2003-05, it is likely to decline in 2006.

Exports of gold jewellery have increased from Rs 5,220 crore during 2001 to Rs 17,015 crore in 2006. The report noted that following rising demand from the US, Belgium, Israel and Hong Kong, the exports of gold jewelleries have gone up.

However, the jewellery makers were facing stiff competition from cheaper products made using superior design technology, the report said.

The Gems & jewelery Export Promotion Council (GJEPC) has set up a few design centres for training domestic jewellers in advanced manufacturing and designing skills and this is likely to boost exports.

The report said that domestic diamond cutting and polishing industry is likely to thrive on the rise in exports.

Presently, India is one of the world's leading diamond cutting and polishing centre, especially, in the processing of small-sized diamonds.

The country should also focus on processing of larger-sized stones, which is now currently dominated by Belgium and Israel, say industry sources.

The report added that the long-term outlook for the diamond and jewellery industry continues to be positive, as the country's competitive advantage is likely to centre around its skilled labour, combined with ready adoption of modern technology and an increasing degree of vertical integration.