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India's gems and jewellery exports decline on global economic slowdown

29 Apr 2016 Evaluate

Gems and jewellery (G&J) exports declined in 2015-16 to the lowest in six years, due to a slowing global economy which reduced the demand for luxury goods. India's net G&J export stood at almost $32 billion (Rs 2.1 lakh crore), as compared to $36.2 bn the previous year, down 5.3% in dollar terms and 11.7% in rupees, as per the data compiled by Gems & Jewellery Export Promotion Council (GJEPC). With an estimated employment of 3.5 million in this sector, both domestic and export, G&J claims to be the second largest employer in India, after the petrochemical.

The fall in G&J shipment was largely driven by a sharp fall in export of cut and polished diamonds at almost $20 bn as against $23.2 bn in 2014-15 (a fall of 7.5%). In rupee terms, however, the slump was 13.7% to Rs 1.31 lakh crore, from Rs 1.41 lakh crore the previous year.

The decline was partly compensated by a sharp upsurge in export of gold medallions and coins, and silver jewellery. The former jumped 84 per cent to $5.2 bn (Rs 34,243 crore) and of silver jewellery by 44.2 per cent to almost $3 bn (Rs 19,407 crore) from $2.1 bn (Rs 12,569 crore) the previous year. Ironically, gold jewellery is available in every nook and corner but bullion was not available for making ornaments. Buying gold from the open market at such a high duty is not feasible for exporters to compete with players from other countries where gold is available duty-free.

India’s export of G&J are likely to remain under pressure in the current year, too, despite improvement in business sentiment from the world’s largest consumer, America, which takes nearly half of India’s diamond jewellery production.

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