Future of Gold & Jewellery Industry in India

                                       

Brief Introduction of gold Jewellery & use of Gold & gems in Ancient time:

Be it gold or diamond, both of them have been in demand in India since the beginning. The demand for jewellery will never end in India. Just like people do not think of selling property after buying, similarly they do not sell after buying jewellery, because people believe that the price of property and jewellery never works. People think of gold as an investment asset. Demand for gold in India is considered good to buy at weddings or any auspicious time. Buying jewellery is everyone's dream. Especially in women, the passion for buying jewellery has been seen more. There was a time when India used to eat golden birds too. We must have heard many times on media channels, in newspapers or from our family members that in India, kings and maharajah's were very fond of wearing gold, we must have seen in old films and TV serials that a king was distributing gold among his subjects was helping. An estimate can also be made from this that how much gold was there in India. The hobby of wearing jewellery has been going on since ancient times.

The craze of jewellery is not limited to a country like India, but it is also in great demand in foreign countries. Just as jewellery is given as a gift on the functions of relatives and friends in India, similarly gifts of jewellery are given in other countries as well. The jewellery sector in India contributes more than 7% to the GDP. There was a time when one had to go to the goldsmith shop to buy gold in India, but nowadays branded jewellery is also available in the market. But the branded jewellery market still seems a bit out of reach of the lower middle class because the price of branded jewellery is a bit high.

Covid19 Impact on Jewellery Industry:

The jewellery sector has suffered a lot due to covid 19. Especially small retail shopkeepers. All the markets have been closed due to the lock down. When the jewellery shops would be closed during the wedding season, then how could the jewellers sell? Shops have not been open even during the festival days, due to which many shopkeepers and jewellery companies have suffered losses. Weddings and festival days are considered to be the best days in India, in which the sale of jewellers is more. But the Government of India has given the jewellery industry assurance that it will be given relief by helping this industry.

Market cap & import export Data of Jewellery Industry:

The jewellery industry has an important role in the economy of India. Gems & Jewellery segment business of more than $ 22 billion has been recorded in the financial year 2021. The export business in the same segment has registered more than $3 billion. Which was $35 million in the 2020 financial year? If you look at this data, then the export rate is doing very well.

Countries like America, Dubai, HongKong; they import the most of Gems & jewellery. Of these, America is above all, followed by Hong Kong & Dubai. According to an estimate, the US imported more than $ 900 million in 2020 and Hong Kong and Dubai imported more than 40% of the total from India. It can be estimated from this data that the export growth of the Gems & Jewellery sector in India is very high and in simple words, the demand for jewellery of India is very high in the foreign country, due to this the growth of the Gems & Jewellery sector has been estimated where May go. If we talk about, India also imports gems & jewellery. In the financial year 2021, an import business of more than $ 15 billion has been registered. In this, India has imported gold worth more than $ 240 million.

Investment of funds & Government role in Gems & jewellery Industry:

The Government of India has increased the limit of Foreign Direct Investment in the Gems & Jewellery Industry to 100%. One thing is good that in the financial year 2020-2021, India has recorded more than $ 1200 Million Foreign Direct Investment. In this, Reliance Industries, one of India's biggest business brands, also expanded into the jewellery industry through e-commerce business and launched 5gm, 10gm Silver Coin & 1gm, 2gm, Gold Science through JioMart. Also Reliance groups opened new show rooms of Gold & jewellery. It means big business groups of India is expecting good growth in this sector & this is the reason business group reliance is investing much in jewellery & gems industry.  If seen, then the craze of wearing gold in men is also not less. Keeping this in view, PGI launched showrooms in India in the Men's segment. Men’s also like to wear gold chain, gold bangle and bracelets.

Jewellery & gems is also a huge business in the fashion industry, the business of stones & luxury fashion jewellery was more than 50% before Covid 19. If seen, the government has also supported the India jewellery industry, if we look at the policy announcements, the government has reduced the import duty on gold and silver, which is now 7% but earlier it was 12%. The Indian government has also decided to make hallmarking mandatory on gold. The target has been kept to complete this decision in the time frame of one year.  This decision of the government was welcomed by the domestic gems & jewellery associations of India. The finance ministry was asked to keep records of cash transactions of up to 10 lakhs and up to $1,300 to prevent money laundering. This was considered a very good step. If we talk about the future, then online gold market is going to be very good in India. An estimate is being made in which more than 3% of online sales are being claimed at any time. The growth in the gold industry or gems or jewellery industry is expected from the railways given by the government.

In Nutshell, we say that the future growth of the of the Jewellery industry in India is going to be very good. The demand for Gems & Jewellery will never come to very down level. This industry will also overcome very soon from the covid impact as the situation will be normalised. This industry will attract long term investors but before making any investment, always check the past performance and balance sheet of the company. This advice is not for investors those want to invest in jewellery sector , this suggestion is valid in all industries where you want to make investment.  

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