GJEPC’s Indo-CIS Buyer-Seller Meet Blazes New Trail
The Indian gem and jewellery export production industry is making a concerted effort to open up new markets. It made a good beginning with the former states of the erstwhile Soviet Union and some East European nations.
The Gem & Jewellery Export Promotion Council (GJEPC), in a bid to open up the as yet untapped but potentially lucrative markets of the Confederation of Independent States (CIS) and East Europe, organized a buyer-seller meet on March 24th and 25th in Mumbai.
Seventy buyers from 60 companies in 12 CIS and East European countries came looking for product from 26 Indian firms offering gold- and silver jewellery set with diamonds and coloured gemstones along with loose diamonds and coloured gemstones.
GJEPC chairman Sanjay Kothari said, “The meet was part of the Council’s effort to increase business with the fast growing CIS markets.” He estimated the combined worth of these markets at nearly $7 billion.
Nihalchand Javeri
Nihalchand Girdharilal Javeri
According to Kothari, the meet was the culmination of an effort that began with an Indian delegation representing every sector from loose stones to jewellery visiting several CIS nations. The delegation carried no product, but had communications materials introducing the Indian production industry to these countries. This visit was followed by several Indian firms participating in the Ukraine gem and jewellery trade show. After this, the GJEPC hosted a delegation of journalists from these countries, taking them around and showing them the size and scope of the Indian gem and jewellery production industry. Inviting buyers here, he said, was the logical last step.
The buyers were an eclectic mix – jewellery manufacturers, retailers and even diamond manufacturers looking to augment their business. Demand seemed to be all across the spectrum, from large VVS loose diamonds to diamond set gold jewellery and silver jewellery set with coloured gemstones. Much the biggest demand was for coloured gemstones and silver jewellery. Diatrends sales manager Sandeep Sharma noted the visitors were interested in a wide range – amethyst, blue topaz, citrine, blue sapphire, ruby and emerald, either as loose stones or set in jewellery.
Sunay Gandhi
Vishal Diamonds
Nihalchand Javeri of Nihalchand Girdharilal Javeri said that the visitors were impressed with the designs and the variety available in India. Nimish Shah of Mirage Creations commented that though the response in terms of business wasn’t exceptionally good, the exchange of ideas was stimulating. The buyers seemed open to all kinds of products and were willing to experiment. “They have the financial ability to buy and are looking for trendy and designer jewellery. All carat sizes are acceptable to them as long as the design is good. Silver jewellery studded with coloured gemstones seems to be quite popular because of the price factor.”
Sunay Gandhi, partner, Vishal Diamonds, too, was optimistic about the event. “They appreciated the variety we offered. This is definitely a promising market for us, but we may face some technical and logistical problems like the lack of freight facilities, high taxes etc.” He feels that eventually India will be seeing more buyers from these countries coming here, but this will only happen after the barriers in these countries are lowered.
Tariff barriers are currently a huge problem in gaining access to these markets. Import duties run as high as 25 per cent, while VAT and other taxes add close to another 20 per cent. Kothari says the GJEPC is looking at the option of delivering product to customs bonded warehouses at airports around these countries, allowing buyers to take in only what they are sure they can sell.
Currently, most of these countries source product from Italy or Turkey. One Polish buyer expressed surprise after seeing the product on offer at the meet, saying that cheap, poor quality silver jewellery was currently being offered in Poland as ‘Indian’ jewellery and that she had no idea that quality goods were available at prices highly competitive when compared to what one paid in Italy.
Putting the whole meet in perspective, Goldstar’s director for European marketing Vikram Advani said, “The buyers have been exposed to lot of variety here and they’ve definitely discovered something new. It was a two-way learning process as both, the buyers and the sellers, learnt something from each other.”
Entering The Dragon
A GJEPC delegation from India visited China with a view to exploring the possibilities of Indian polished diamonds being sold directly to that country’s fast-growing jewellery production industry, that caters to one of the world’s largest and fastest-growing consumption markets.
A seven-member Indian delegation led by Gem & Jewellery Export Promotion Council (GJEPC) vice chairman Vasant Mehta visited China from March 11th through 17th on a mission to identify areas for joint ventures and to enhance the bilateral trade relations.
“We were looking for a diamond market,” Mehta said, “and the Chinese jewellery industry, trying to meet the demand of a fast-growing domestic market, is looking for reliable suppliers of diamonds.” According to him, the Indian delegation found a very receptive Chinese industry. “We explained that since India and China are two of the world’s fastest-growing economies, the two of us working together could make both our markets the two biggest in the world as well,” he said.
China had a GDP growth rate in 2006 of 10.7 per cent and a per capita gross domestic product (GDP) of $1,900. It is the second largest economy after the United States if measured in purchasing power parity (PPP) terms or the fourth largest in the world. It has been growing rapidly since 1979 at an average rate of 9.6 per cent and has attracted foreign direct investment of over $600 billion since beginning market reforms. China also has the largest foreign exchange reserves in the world at $1.1 trillion.
The areas visited by the delegation included Shenzhen, Panyu near Guangzhou, Shanghai and Beijing. Apart from visiting pertinent institutions in each city, the delegation also made presentations to manufacturers, wholesalers and retailers on the Indian industry and what it could do for them.
In Shenzhen, a jewellery manufacturing and trading hub, the delegation visited two factories and the Gem & Jewellery Trade Association of China’s laboratory. Panyu manufactures over 60 per cent of China’s jewellery in China with 320 factories employing over 70,000 people. Panyu also exports jewellery to Europe, North America, the Middle East, Japan, Hong Kong and Taiwan. Here, the delegation visited Worldmart, an ‘everything under one roof’ concept for jewellery production promoted by the government. Many Indian companies are already in Worldmart, which is slated to be operational from April.
In Shanghai, the Indian team visited that city’s famous diamond exchange – 70 per cent of whose members are Hong Kong-based Indian firms. Though this is yet to be confirmed, there is a possibility that routing diamond exports to China through the Shanghai Diamond Exchange may result in no value added tax (VAT), currently a prohibitive 4 per cent. And finally, in Beijing, Mehta asked the Gem & Jewellery Trade Association of China to send a buyer delegation to IIJS 2007.
