Diamonds, Stones To Grab Further Share In Jewellery Market

(via PTI) Economic Times writes:

Diamonds and gemstones jewellery are set to grab a greater market share from plain gold and silver ornaments with prices likely to come down after import duty cuts proposed in this year's union budget, making them more affordable for Indians.

Studded jewellery has already been taking some market share from plain gold and silver jewellery over the recent years and the proposed duty cuts are likely to further scale up their demand in the Indian market, global metal consultancy firm GFMS says in its latest report.

"With the reductions in import duties on precious stones, the domestic studded jewellery would become more affordable for consumers," GFMS metal analyst Sanjiv Arole said.

India is already the world's third largest consumer of diamond jewellery after the US and Japan and a further drop in prices could precipitate some important changes in jewellery consumption patterns in the near future, GFMS said.

The production of laboratory-manufactured diamonds is also likely to increase dramatically in the coming years, it added. While lab-manufactured diamonds appear quite identical to the natural diamonds, they cost about 70 per cent less.

India, as the largest cutting and polishing centre, is likely to become one of the key regions for processing these stones and this business would ultimately find its place in the domestic jewellery markets like Surat and elsewhere in the country.

Finance Minister P Chidambaram proposed in this year's budget to reduce import duties on cut and polished diamonds, coloured stones and corals.

While coloured stones or gems are also gaining popularity among consumers, their gains are unlikely at the expense of diamonds which are showing robust growth across most of the global markets. India is one of the fastest growing diamond markets in the world yet branded diamonds segment accounts for a meagre 12 per cent. The size of the overall diamond market in India is supposed to be over 1 billion dollar. Diamonds are gradually becoming a fashion purchase with branded segment having an edge over unbranded jewellery.