<div><em>The gem and jewellery industry is already an economic powerhouse, one with multiple possible avenues for further growth. A focused administrative centre within the government can help it realise much of this latent potential, writes <strong>Stephen Rego</strong></em></div><div> </div><div>Some time in the near future, will the Indian cabinet have a portfolio handled by a ‘Minister for Gems & Jewellery’? The creation of such a position is one of the important recommendations of a recent report, entitled ‘Gems & Jewellery Industry: Contributing to Make in India’ released by industry body Assocham, and based on a study carried out for it by Thought Arbitrage Research Institute (TARI).</div><div> </div><div>While most initial reactions may be to dismiss away this suggestion, a deeper analysis indicates that it merits serious consideration.</div><div> </div><div><table align="right" border="1" cellpadding="2" cellspacing="2" style="width: 200px"><tbody><tr><td><img alt="" src="http://bw-image.s3.amazonaws.com/Stephen-Rego200_0.jpg" style="width: 200px; height: 200px;"></td></tr><tr><td><strong>Stephen Rego</strong></td></tr></tbody></table>Consider a few facts that the report has culled from different studies and sources. The gems and jewellery industry in India today was estimated to have had a market size of Rs 463,000 crore during 2012-13. Of this, the segment catering to domestic consumption accounted for approximately Rs 251,000 crore while the export sector had a turnover of Rs 212,800 crore. This worked out to about 6-7 per cent of the country’s GDP. </div><div> </div><div>Further, in 2012-13, the export sector was the second highest contributor to the country’s commodity exports with a share of 13 per cent, after petroleum products (20 per cent).</div><div>Currently, it ranks sixth among all the manufacturing industries in the country in terms of employment, providing jobs to an estimated 46.4 lakh people.</div><div> </div><div>Moreover, it is one of the few manufacturing industries where India is the dominant global player, and has been so for well near two decades. Of the total worldwide production of cut and polished diamonds, India manufactures about 65-70 per cent by value and almost 90 per cent in terms of actual number of pieces. </div><div> </div><div>The Assocham report projects that all these numbers can grow significantly provided a proper enabling environment is created.</div><div> </div><div>The structure of the gems and jewellery business belies the important economic role it plays in India. It is huge, yet largely unorganised and highly fragmented. Jewellers are present in almost every town in the country, and most medium to large villages also have goldsmiths. At present, there is no definite figure of the number of jewellers across the country, though it would clearly be well over a lakh. Many of them have been around for over a hundred years, and are currently run by the fourth or fifth generation, yet they by and large, fall within the vast unorganised sector.</div><div> </div><div>The organised sector is relatively new – the first brand, Gili was launched only in 1994 – but it is highly visible and growing at a healthy rate. The Assocham study estimates that the organised jewellers account for 15-20 per cent of the overall business today; others estimate slightly lower numbers.</div><div> </div><div>Even the organised sector is not a homogenous entity; it can be sub-divided by markets -- export and domestic; by position in the pipeline – manufacturing and retailing (and there are many players involved in both); by product category – diamonds, jewellery, coloured gemstones. In turn each of these have further segments. For example, jewellery can be plain gold, diamond studded, silver, coloured gemstone studded, machine-made, handmade etc. The adoption of modern technology, management and marketing practices is what distinguishes the organised sector from the rest. </div><div> </div><div>Each of these segments has one or more associations to voice its concerns and interact with the authorities. Grasping the finer points of this industry and drawing up appropriate mechanisms and measures is clearly no easy task. </div><div> </div><div>Moreover, because of its unique history and the high value of goods produced, the industry has traditionally been fairly closed and opaque in its functioning. </div><div>The organised sector however has broken new ground. Exporters are audited by suppliers of raw materials like De Beers or Rio Tinto, and even by the large chain stores and businesses like Walmart, Signet and others that markets their products in the overseas markets. </div><div> </div><div>It is time to build on this and ensure that the pace of change gathers momentum. As the Assocham study puts it, the gems and jewellery sector “deserves the same interest and consideration as other manufacturing sectors such as food processing, textiles, pharmaceuticals etc.” </div><div> </div><div>As a first step in that direction, a dedicated government structure could be set up that understands the various nuances of the business and gives attention to developing appropriate policies and administrative mechanisms. The industry needs a framework for growth, and support in establishing and strengthening the infrastructure for its implementation. A focused administration could go a long way in providing the boost for a new phase of growth.<br><br><em>(Stephen Rego has been a journalist since the mid-1980s, and has spent close to two decades tracking the gem and jewellery industry while holding different editorial positions in industry specific publications and websites</em>) </div><div> </div>
