How Gems & Jewellery Sector Plays A Significant Role In The Indian Economy
India's fascination with jewellery dates back to 5,000 years ago in the Indus Valley. At that time, the country was the largest manufacturer and exporter of beads to the world. It was also home to diamonds, semi-precious stones and gold. In fact, for more than 2,000 years, India was the sole supplier of gemstones to the world. Golconda diamonds, sapphires from Kashmir and pearls from the Gulf of Mannar were the most desirable and attracted merchants from across the globe to India. While for the rulers, these precious stones and jewellery were a statement of power, success and reputation, for Indian women, they were and still are considered as imperatives for providing social and economic security, the value of which may never depreciate.
Today, the gems and jewellery industry is one of the biggest businesses in India, playing a crucial role in the Indian economy. Contributing around 7 per cent of the country's GDP and 15.71 per cent to India's total merchandise exports, this is one of the fastest growing sectors that are extremely export-oriented and also labour intensive. As a result, the industry brings in huge foreign exchange and gives employment to over 4.64 million workers, both in organized as well as unorganized sectors.
The gems and jewellery market in India is home to more than 300,000 players, with the majority being small players. Its market size is about US$ 60 billion as recorded in 2017 and is expected to reach $100-110 billion by 2021-2022. Meanwhile, the country's gems and jewellery sector contributes 29 per cent to the global jewellery consumption as the exports stood at $ 24.89 billion in April-December 2017. During the same period, exports of cut and polished diamonds stood at US$ 17.2 billion, thereby contributing about 69 percent of the total gems and jewellery exports in value terms. Moving further, the exports of gold coins and medallions stood at US$ 1,736.02 million whereas the silver jewellery export stood at US$ 3,114.85 million during April-December 2017. Being one of the largest exporters of gems and jewellery, the industry is contributing a major chunk to the total foreign reserves of the country. UAE, US, Russia, Singapore, Hong Kong, Latin America and China are the biggest importers of Indian jewellery.
The rising demand for Indian gems and branded jewellery from across the globe is primarily being driven thanks to the increase in per capita income of the consumers and a stronger purchasing power of the middle-class woman. In fact, the sector is now witnessing changes in consumer preferences. Buyers of jewellery are demanding new designs and varieties and are open to making purchases through the medium of online platforms, while the youth is showing a keen interest in semi-precious stones for astrological reasons.
Despite such escalating demand, there is a lack of skilled workmen in the industry. Post demonetization, not many trained artisans are willing to join the industry due to better work opportunities in different fields and absence of successive governments' intervention in providing proper infrastructure. To stabilize this situation, the central and state governments must roll out a strategic plan that can bring back the long lost 'Sone Ki Chidiya' (the golden bird) status of India.
Organized mining sectors must explore numerous mines of precious and semi-precious gemstones that have not been discovered yet. The government must establish cutting centres near them to ease the job for gem cutters in marketing their wares. Moreover, as the industry is fragmented, local players constitute about 80 per cent of the overall market. They are in dire need for technology intervention and capital support to improve their operations and make them cost-effective. The country also needs institutions providing vocational training to the aspiring artisans willing to make a living out of jewellery making and diamond and gemstone cutting.
The industry is already seeing an influx of established brands who are helping the market become more organized. Further, the growth in the gems' and jewellery sector is likely to be dominated by the increasing penetration of new players. They are expected to not only unravel the potential to create new jobs but will also contribute to the economy through voluminous exports. What is needed now is the intervention of the concerned authorities and the government to help the new and existing players tap the full potential of the industry and make India the Glittering Nation once again!
