Silver jewellery gets a golden glitter

Consumption of silver jewellery has jumped by at least 30 per cent over the last nine months since gold prices started climbing. Typically, the price of 20 gm of gold can fetch a kg of silver. Moreover, silver jewellery offers more options with new designs and better craftmanship.

The price of standard gold in Mumbai is now Rs 9,935 per 10 gm, while the cost of a kg of silver is Rs 20,735.

The price of silver has not gone up in tandem with that of gold.

According to experts, if gold prices go up further, which is most likely as Securities and Exchange Board of India (Sebi) is advocating gold traded fund(GTF), the silver jewellery demand will go up further and account for 50 per cent of total jewellery sales in India. At present, silver accounts for about 40 per cent of the total jewellery demand.

The annual domestic consumption of silver is around 6,000 tonne compared with 800 tonne of gold. Approximately 30-35 per cent of the annual silver consumption is on account of jewellery while the rest goes for industrial applications.

Indian designs and craftmanship is appreciated the world over and export orders from Australia, Europe and the US have been pouring in. The total Indian exports for studded and non-studded silver jewellery (including palladium which adds to the durability and aesthetic value) jumped to Rs 653.82 crore ($148.43 million) in 2005-06 from Rs 597.04 crore ($133.09 million) in the previous year.

Goldiam International, a Rs 250-crore group is one of many companies which has been looking to cash in on the silver wave by introducing the cheapest varieties of silver jewellery. The prices of its silver jewellery ranges between Rs 250 and Rs 5,000 and sold under the brand name "Ola".

Forever Precious Jewellery & Diamonds, another Rs 250-crore B2B diamond jewellery manufacturer, may also start silver jewellery production any time now. The company is planning to open 25 retail stores this year at an investment of Rs 100 crore. At present, it has 12 stores across the country.

Incidentally, white gold is the preferred choice in the international markets as well. "Silver being naturally white and cost competitive is attracting more and more consumers," points out another jeweller.

Raju Maheshwari, proprietor, Silver and Gems, Jaipur, feels that attractive finishing and polishing, leading to lesser worries in safeguarding of silver jewellery are inviting opportunities for young designers to use their skills. This has enabled the industry to grow much faster than any other industry.

"No body knows what will be the price of gold one year down the line. At this point, silver seems to be the best bet as with an investment of as low as Rs 250 one can buy a jewellery," adds Maheshwari.

Jay Mehta, COO, domestic retail division of Goldiam, says his company is focussing on working women, especially those working in BPOs. The jewellery produced by his firm uses 92.5 per cent silver and 7.5 per cent palladium.

Ola uses the sales network of Pantaloon which has picked up 10 per cent equity stake of the company.

Suashish Diamonds, a leading diamond jewellery manufacturer, has also done researches on the growing popularity of silver jewellery but has no plans to enter the business.

"In our business, diamond is the most important component and it does not make much difference whether gold or silver is used to hold it," says Marzin Shroff, president, marketing, Suashish Diamonds. However, he admits that silver has slowly started substituting gold even for diamond jewellery.