Gems and jewellery exports may glitter less

Gems and Jewellery exports may have shot up by an impressive 63 per cent in the first four months of 2010-11, but the trend is not likely to remain robust and the current fiscal may close with just about 15 per cent growth.

"We are cautious about the export growth in the coming months due to weak global recovery. We expect 15 per cent export growth in 2010-11 year-on-year," Gems and Jewellery Export Promotion Council (GJEPC) Chairman Basant Mehta said.

In the first four months of 2010-11, exports of the precious items grew by 63.4 per cent to $11.4 billion year-on-year.
    
However, it was mainly attributed to a low base of comparison in the first four months of the fiscal 2009-10.
    
Mehta said that the recovery in the US and the European markets had come on the back of stimulus packages given by their governments.
    
With focus shifting to fiscal consolidation, the demand from these markets may slow down.
    
Gems and jewellery are among the largest contributor to India's exports basket.
    
Of the total exports of $182 billion, the sector accounted for $28.41 billion in 2009-10.
    
While the recovery in the western markets look fragile, exporters are finding demand from China and the Middle East.
    
However, the overall outlook remains that of cautious optimism, Mehta said.
    
Expansion of gems and jewellery exports which had peaked by 74.2 per cent in June on a low annual basis of comparison, saw a lesser pace of 40 per cent in July.
    
The UAE is the main destination for Indian gems and jewellery, accounting for 31 per cent of the total exports, followed by Hong Kong and the US.