India’s jewellery exports to the United States declined 20 per cent on the occasion of Christmas and New Year due to the economic slowdown in the world’s largest economy.
Christmas and New Year sales constitute over 25 per cent of the $100 billion US jewellery sales. India contributes about 34 per cent to the overall US retail jewellery sales.
The 20 per cent fall in exports adds to the 40 per cent slump in manufacturing since the slowdown started in October. Manufacturing has been especially hit in the gold industry’s prime areas such as Seepz in Mumbai, which depends solely on US exports.
Sabyasachi Ray, executive director, Gems & Jewellery Exports Promotion Council (GJEPC), said the implication on the overall diamond and jewellery sales from India would be to the tune of 80 per cent in the short term at the local manufacturing level, which includes domestic retail sales and exports.
India exported gems and jewellery worth $20.921 billion last year of which US accounted for 26 per cent or $5,461.05 million. Total gems and jewellery exports to the Hong Kong also recorded to $5,354.54 million of which 50 per cent is re-exported to the US.
This means, India’s export of gems and jewellery is destined finally to the US to the tune of over 40 per cent.
A decline of 20 per cent on export will have 40 per cent fall in receivables which means the situation is grim, said Ray.
Rai added that the export sentiment might remain subdued for the long term as well as the US economy continue to remain under pressure. In the long term, however, the overall jewellery sales will be hit at least 15 per cent with diamond sector expected to contract 20 per cent while gold jewellery expected to underperform 15 per cent, Ray forecast.
The US constitutes about 50 per cent of the world’s overall traded gems and jewellery worth $97 billion. Hence, any fallout in the US sales will have direct implication on the global sales, said Mehul Choksi, Chairman, Gitanjali Gems Ltd.
Gitanjali Gems, a Mumbai-based leading jewellery maker and retailers, which largely supplies finished jewellery from India to its 150 retail stores in the US, however, has witnessed no decline in sales so far this year. US business contributes about 12 per cent of the company’s annual turnover of Rs 2,654.33 crore (2007-08).
Choksi admitted 20 per cent decline in US sales during Christmas and New Year. Gitanjali has kept all its US expansion plans on hold till global economic condition improves. The company was earlier planning to expand its retail base in the US from the existing 150 shops to now to 175 by the end of the current financial year.
