Chinese, European firms take sheen off synthetic gem industry

Is the synthetic gem industry in Trichy losing its shine? At least that is the indication the dwindling trade in the segment for the past three to four years is giving.

Not long ago, this town in Tamil Nadu catered to around 75 per cent demand of the whole country for synthetic gems. But now, the city's share has fallen to just 40 per cent.

Speaking to Business Standard, Ashok D Gandhi, joint secretary of the All India Synthetic Gems Manufacturers Association, said the synthetic gem and jewellery industry is worth over Rs 200 crore in the country. The industry which used to provide livelihood to more than 2 lakh workers now cannot sustain even a lakh.

Due to lack of work in the segment, there has been an exodus of workforce from the synthetic gem industry to other areas. The hands that adroitly used to design glittering stones for a varied sections of people, are now toiling in the fields.

A major reason for the synthetic industry falling apart is the Chinese invasion of the labour-intensive market. The well-equipped Chinese juggernaut has proved too superior to the local manufacturers. Using their superior machinery and designing skills, Chinese companies are able to produce stones in any shape and size. They create gems so skillfully that it is very difficult to distinguish between the real and the fake, he said. Next to Chinese came European companies into the Indian market, further eroding the demand for local manufacturers.

For instance, Signity is the most popular brand which accounts for a sale worth Rs 100 crore in India. This brand is a product of a joint venture between Golay Buchel, a Swiss company, and Swarovski, an Austrian company. Signity outlets and dealers are spread across the country. Preciosa, a Czech company and Sprankel, a Belgian company, have entered the Indian market with aggressive market strategy. While the Chinese offer cheap varieties, European firms have a wide range of products, sizes and shape up their sleeve.

To save the local industry from poaching foreign companies, the most important step is cutting down the import duty on zirconium oxide, a key raw material which is not available in the country, industry sources say. At present, as much as 40 per cent duty is imposed on zirconium oxide, he felt.

However, the loss for Trichy is a gain for Rajasthan's capital Jaipur, which has cornered 20 per cent of the trade, followed by Khambhat (Cambay as it was known earlier) in Gujarat.

As Trichy is lagging behind both in manufacturing and trading, the Pink City is set to emerge as a hub for gem industry. Heavy taxes in Tamil Nadu and a lack of skilled labourers are proving to be major hurdles for Trichy to retain its dominance as the centre of gem industry.

R P Jain, an octogenarian and an old hand in the industry, says three generations of his family had been engaged in gem trade in Trichy. Now some of his family members are already branching out into other areas. His son has already left the family line to join the IT sector. An active member of the Gems Manufacturers Association, Jain stresses the need for a training centre in gems polishing and cutting in Trichy.

Ashok Gandhi says the association is trying to set up a college to boost the industry. "We have already planned a local college of arts & science to provide basic infrastructure for teaching and research facilities. We are awaiting formal clearance from the Gems and Jewelleries Export Promotion Council."