Low consumption leads to drop in jewelry export

27 Feb '08

2 min read

Exports of Indian jewelry to US showed a 4.8 percent decline in 2007. This came as a major shock to the local exporters since the year preceding it saw nearly 40 percent growth in the same market.

In the period ranging from 2003-06, India experienced a 30 percent growth in its jewelry shipments to the US.

Further to substantiate, reports show that there has been no change in the market share of India in the total imports made by US.

India still stands as the largest jewelry supplying country to the US accounting for about US $2.205 billion worth imports made by America.

Until 2007, India enjoyed the General System of Preference which allowed easy export of goods to the US. However, after the expiry of the scheme in July last year, the country has been deprived of this advantage, which has resulted in declining exports of jewelry.

Talks about renewing the scheme is still under consideration but until then, domestic exporters have planned to sell its good in the local market. This will prove to be a wise step since India has itself emerged as a major consuming market for jewelry with a growth of 20 percent every year.

India consumes nearly 800 tons of gold accounting for about 20 percent of the world gold consumption, of which nearly 600 tons goes into making jewelry. The Indian jewelry market, estimated to be $13.5 billion in fiscal 2006-07, accounts for 8.3 percent of world jewelry sales.

An interesting fact, however, is that India is not the only country facing this declining trend. Ten out of the fifteen top exporting countries, with an exception to China, are dealing with a drop in exports.

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