Introduction
India is the worlds second-largest gold consumer and the worlds largest diamond
cutting and polishing centre. It is the hub of the global jewellery market because of its
low costs and availability of cheap labour. The gems and jewellery sector is home to more
than 3,00,000 gems and jewellery players in India. To keep up with global market trends,
India has been deploying modern techniques to its traditional know-how and processes. The
industry is seeing increased penetration of branded and organized players due to rising
brand consciousness, adoption of Western lifestyles by consumers and rising urbanization.
Further, the growing trend of work-from home has led to significant growth in digital
channels and online sales of gems and jewellery
Market Size
The global gold jewellery market, valued at $193.3 billion in 2022, is projected to
reach $304.2 billion by 2030, growing at a CAGR of 5.8% from 2022 through 2030 in the
post-COVID-19 business landscape. Gold is trusted more than the currency of the countries.
The Indian jewellery retail sector is currently valued at approximately $76.3 billion
in FY23 and is expected to grow substantially. This market is expected to grow at a CAGR
of 5.54% by 2027. This projection signifies the sectors potential for significant
expansion and economic impact in the coming years.
The organized retail segment currently holds a share of approximately 35%, featuring
prominent national and regional players. In contrast, the unorganized sector, comprising a
vast network of over 5,00,000 local goldsmiths and jewellers, dominates the remainder. The
organized sector displayed remarkable resilience, bouncing back swiftly and accelerating
after the pandemic. This revival was propelled by a combination of factors, spanning both
the supply side and the resurgence of consumer demand. While India traditionally boasts a
deep-rooted affinity for gold jewellery, capturing a substantial share of approximately
85% of the market, an intriguing trend is emerging. With its sparkling allure, studded
jewellery is gaining momentum and attracting growing participation in the jewellery retail
landscape. The prominence of gold jewellery stems from its profound cultural and religious
significance, intertwined with a legacy of trust and reliability that gold embodies. Gold
jewellery demand in India is primarily driven by weddings significant role in the
culture. Weddings in India holds immense importance and is marked by grand celebrations
and traditions. Gold jewellery is essential to Indian weddings, representing prosperity,
blessings, and the eternal bond between couples. The demand for gold jewellery remains
resilient in India due to the enduring wedding demand. Families consider gold jewellery as
a valuable asset, both financially and emotionally, and often pass it down through
generations. This cultural significance and belief in the auspiciousness of gold ensure
its continued demand in the Indian market.
Investments/Developments
The Gems and Jewellery sector is witnessing changes in consumer preferences due to
adoption of western lifestyle. Consumers are demanding new designs and varieties in
jewellery, and branded jewellers are able to fulfill their changing demands better than
the local unorganized players. Moreover, increase in per capita income has led to an
increase in sales of jewellery, as jewellery is a status symbol in India.
India emerging as a preferred destination In recent years, the world has witnessed a
shift in the global economic landscape due to geopolitical and trade tensions between
major nations. This has led to a surge in the adoption of the China Plus One strategy by
multinational corporations, which intend to reduce their dependence on China by
diversifying their investments to other nations. India will benefit from this strategy due
to its robust manufacturing sector and favourable government policies. It will present
significant opportunities for India to enhance its manufacturing capabilities and attract
more foreign investment which augurs well for the gems and jewellery sector.
Digital technology and E-commerce expansion
The rise of digital technology will transform the way gems and jewellery are marketed
and sold. With more consumers shopping online, retailers are likely to invest in digital
platforms and virtual experiences to enhance their customer engagement and sales. Leading
players are introducing virtual reality (VR) experiences, through which, customers can
select
any jewelry, see it from different angles and zoom on it to view intricate designs.
Social media will also play a key role in promoting gems and jewellery, with influencers
and online communities driving demand for specific brands and designs.
Rising demand among the young, middle-class population
The jewellery sector is poised to benefit from a growing population of young,
middle-class consumers, increasing disposable incomes and a desire for luxury items and
branded jewellery. The millennials, Gen Z and tech-savvy customers are becoming more brand
conscious which is boosting the demand for high-quality, branded jewellery. In addition,
emerging market consumers for whom established brands inspire trust and a sense of
upgraded lifestyle are driving the branded jewellery segment.
Increasing women workforce
The growing percentage of women workforce in India and rising income levels provide
them more financial power in purchasing decisions. Increasing income levels of working
couples and lifestyle changes have fueled the demand for gems and jewellery.
Government Initiatives
The government has declared the gems and jewellery sector as a focus area for export
promotion and signed a Comprehensive Economic Partnership Agreement (CEPA) with the United
Arab Emirates (UAE) in March 2022, which will provide the industry duty-free access to the
UAE market and further boost exports of Indian gems and jewellery. Timely implementation
of the India-UAE Comprehensive Economic Partnership Agreement (CEPA) by the Ministry of
Commerce & Industry has resulted in a remarkable 17% growth in exports of plain gold
jewellery in FY 2022-23. The government targets gems and jewellery exports of USD 100
billion by 2027.
Key Issues Facing the Players Weak demand amidst higher inflation
Record high inflation, tightening of monetary policies and fear of recession are major
concerns for the gems and jewellery sector. Persistent inflationary pressure and the
rising cost of living have impacted consumer sentiment and reduced spending on luxury and
jewellery products.
Huge dependence on imports
Raw materials play a major role in the Indian gems and jewellery industry. India
imports nearly 90% of the raw materials, especially rough diamonds and gold bars.
Therefore, the industry is vulnerable to any adverse regulations that may limit the raw
material supply of diamond and gold jewellery. Excess imports can also cause worry for
India when exports make fewer earnings in the foreign exchange.
Unorganized nature
Indian gems and jewellery industry is highly fragmented and unorganized and is majorly
dominated by small jewellery shops that are run by families for years. More customers
prefer these shops as the price of jewellery is usually higher in the organized market.
High Credit to Buyers
Manufacturer and suppliers are expected to give huge credit support to the wholesaler /
retailers leading to huge working capital requirement.
Outlook
Despite the economic uncertainties and underlying inflationary pressures, the outlook
for the global economy is slightly less gloomy than earlier anticipated. The International
Monetary Fund (IMF) has projected global GDP growth to decline from 3.4% in 2022 to 2.8%
in 2023 and rise to 3.0% in 2024. The growth of Advanced Economies (AEs) is projected to
decline sharply from 2.7% in 2022 to 1.3% in 2023 before rising to 1.4% in 2024. Economic
prospects for Emerging and Developing Economies (EMDEs) are on average stronger than for
Advanced Economies. EMDEs are expected to grow at 3.9% in 2023 and 4.2% in 2024.
Developing economies like South-East Asia and Latin America are poised to do well and
benefit from strong job markets and ambitious investment plans by governments in many
countries. Asia-Pacific will be the most dynamic of the worlds major regions in 2023,
predominantly driven by the buoyant outlook for China and India, which will be the major
contributors to global economic growth in 2023.
Operations
Operations: During the year under review, the Company has had no production activities.
There is no sale in the current year the Company has suffered a loss of Rs. 7.34 lakhs as
compared to loss suffered in the previous year of Rs. 6.63 lakhs.
Also the Companys accounts with its banks are in non-performing assets since 2015
leading to stoppage of Companys operations. The Management of the Company has been
putting in its best efforts to mitigate the losses.
Internal Controls & their adequacy
The Company has in place adequate system of internal control. It has documented
procedures covering all financial and operating functions.
Human Resources & Industrial Relations
The Companys Human Resources philosophy is to establish and build a strong performance
and competency driven culture with greater sense of accountability and responsibility.
The industrial relations scenario remained unchanged throughout the year.
For and on behalf of the Board of Directors
| Date: 11th August, 2023 Place: Mumbai |
Gaurav Doshi
Chairman & Managing Director DIN-00166703
G-32, Gems & Jewellery Complex III, Seepz (SEZ), Andheri (E),
Mumbai-400096 |
| Registered Office: G-32, Gems & Jewellery Complex
III, Seepz (SEZ), Andheri (E), Mumbai-400096 CIN: L36911MH1991PLC063357 |
|
+91-9892691696
