Following an advice from the Prime Minister, Indian exporters have for the first time prepared a detailed export promotion strategy and a target of $60 billion worth of gems and jewellery exports in five years.
India's gems and jewellery exports reported a sharp decline over the last five years due to global economic slowdown especially in Europe and the United States. From the level of $43.21 billion in 2011-12, India's gems and jewellery exports fell steadily to $31.98 billion in 2015-16. The industry, however, estimates a recovery in 2016-17 on a rebound in American and European economies. Thus, Indian exporters estimate $41 billion worth of gross gems and jewellery exports from India in 2016-17.
In a recent address to jewellery exporters, India's Prime Minister Narendra Modi had suggested to prepare a strategy for the next five years and start working in that direction. Following his advice, India's apex jewellery export promotion body Gems and Jewellery Export Promotion Council (GJEPC) has set a target of $60 billion and a detailed roadmap to achieve it. The draft strategy, however, is likely to be submitted to the Prime Minister Office (PMO) in three weeks.
The revision in export strategy assumes significance as the industry contributes nearly 13 per cent of India's overall merchandise exports and employs around one million skilled and unskilled workers. The trend in jewellery exports directly impacts employment and business environment in this sector.
"We have set a jewellery exports target of $60 billion by 2022 in a detailed vision document prepared by us. Apart from generic promotion, we would focus on hand crafted jewellery and value addition to achieve the target," said Praveen Shankar Pandya, Chairman, GJEPC.
In a significant change in India's approach, jewellery exporters are planning to focus on value addition for better realisation. Data compiled by GJEPC showed Indian diamond processing units have been shipping out polished stone pieces in a large quantity. Thus, cut and polished diamonds contribute between 40-50 per cent of India's overall annual gems and jewellery exports.
In its revised strategy, Indian diamond exporters are planning to reduce exports of cut and polished diamond pieces and focus on the shipment value added products i.e. studded jewellery. Exports of stone studded jewellery are likely to fetch 10-15 per cent higher realisation than cut and polished diamond and gold jewellery separately.
"Apart from the Middle East, European and American markets are reviving which is a good sign to achieve higher growth. So, we are aiming higher exports through value addition, brand promotion and re-orientation of rough diamond import strategy through its auction sale in India in the bourses like Bharat Diamond Bourse and other such bourses across the country. So, 50 per cent growth in gems and jewellery export is achievable in five years," said Sabyasachi Ray, Executive Director, GJEPC.
In yet another change, Indian jewellery manufacturers are primarily shipping out unbranded products to overseas importers who in turn tag these products with their own brand and charge premiums from customers. Under the revised strategy, Indian jewellers plan to shift from unbranded to branded jewellery for higher value addition and premiums forthwith.
In a revised strategy, Indian jewellery exporters have also decided to spend Rs 20 crore per annum on generic promotion. So, for the next five years, Indian jewellery manufacturers and exporter are looking to spend Rs 100 crore on promotion of branded jewellery in the overseas markets.