US slowdown dents jewellery exports

Gem and jewellery exports in April-November fell to $11.13 billion (Rs 507.74 billion), down 1.01 per cent from the year-ago period, according to data from Gem and Jewellery Export Promotion Council.

The fall in exports was led by the cut and polished diamond segment, down 14.93 per cent to $6.89 billion (Rs 314.76 billion).

Cut and polished diamond segment accounts for 80 per cent of India's gem and jewellery exports, followed by gold jewellery and coloured gemstone.

Gold jewellery exports rose by just 34 per cent to $3.37 billion (Rs 153.93 billion) in April-November. Coloured gemstone exports rose marginally by 0.44 per cent to $0.14 billion (Rs 6.64 billion).

"The rate of exports has fallen owing to economic slowdown in the US, as it is the largest market for gem and jewellery," said Sanjay Kothari, chairman, GJEPC.

The slowdown in economic growth has saturated the demand in US, dealers said. Recent economic data has indicated that the world's largest economy is cooling down.

The third quarter US gross domestic product data shows imports, one of the main components, rose by only 5.3 per cent instead of the expected 7.8 per cent, indicating a fall in demand. The US dollar has been depreciating, and it has fallen to multi- month lows against other major currencies over last six months.

Also, volatility in gold prices in last six months has prompted consumers to remain on the sidelines, dealers said.

Overseas gold prices have been oscillating between $560-$640 an ounce in last six months.

"People are adopting a wait-and-watch mode. The volatility in prices is forcing them to invest in other luxury items like televisions, and cellular phones among others," Kothari said.

Kothari also said the industry, in order to reduce its over-dependence on US, is eyeing other non-traditional markets like Japan and countries within the Commonwealth of Independent States like Ukraine, and Armenia among others.