Gems and jewellery exports from the country are likely to touch 20 billion dollars by 2007 with buyers from the US and European Union increasing bulk purchases of diamond studded jewellery from India because of its affordability, according to a report.
The study by ICRA said India has achieved a reputation of being world's leading diamond cutting and polishing centre for smaller stones. Now industry leaders are looking to process larger stones to clock greater growth by utilising modern advanced technologies besides cheap abundant labour.
Quoting figures released by GJPEC, ICRA said exports of gems and jewellery were expected to touch 20 billion dollars by 2007.
Although, the positive development in the industry has also been due to pick up in demand in major markets like the US, Belgium, Israel and Hong Kong and decline in growth of its major competitors.
The improved perfomance of the Indian GJ industry is also due to the decline suffered by its competitors like Belgium whose polished diamond export declined by 3.8 per cent in 2005 to 9.36 million carats. The volumes of Israel's polished diamonds also decreased by 3.2 per cent in 2005 to 4.49 million carats.
Exports of gold jewellery have increased to Rs 170.15 billion in 2006 from Rs 52.20 billion in 2001, but are constrained by an inability to compete in global markets on the basis of price and superior design capabilities, the report said.
However, India has a positive future in gems and jewellery sector, that would be driven by increased exports to the US and other markets and growth in domestic consumers.
Significant opportunities would also arise because of promotional programmes launched by DTC for leading Indian diamond and jewellery manufacturers and exporters to boost the marketing of their products in India and abroad, the report said.
In domestic market too, diamond industry is optimistic because the healthy growth in world GDP and increased marketing expenditure would result in increased demand growth with countries like India and China becoming a potential new sources of demand for diamonds.
In India, diamonds are an established consumer product, but compared to gold the potential size of the market is only just being recognised, but the country draws a competitive advantage with its skilled labour, technology and increased degree of vertical integration.