In the report, World Gold Council (WGC) focussed on gold market India. Said for the export basket, over the last decade nearly 90% of India’s jewellery exports have flowed to just five major markets: namely, the UAE, the US, Hong Kong, Singapore and the UK. India exports jewellery to a total of 146 countries but most of these are extremely small customers.
And although Indian jewellery is re-exported to many other destinations across Africa, the Middle East and Europe – through hubs such as Dubai and Singapore – the trade needs to develop newer direct export markets to help secure healthier margins.
At present, the likes of Australia and Canada account for a small share of the total (2% and 1% respectively in 2021), but a more focused approach in these jurisdictions should help increase Indian exports as these locations also have a large Indian or Asian diaspora. The same is true for many countries in the Middle East, such as Kuwait, Qatar and Bahrain, where direct exports are currently very small and jewellery is shipped via Dubai.
Trade bodies also need to help focus a spotlight on Indian craftsmanship, as a large part of Indian jewellery is handmade – a skill that is appreciated globally.
Expressing their view on the India-UAE CEPA, the WGC said, the India-UAE CEPA, will help lift the UAE as a jewellery import destination! In February 2022, India and the UAE signed a landmark Comprehensive Economic Partnership Agreement (CEPA), which was implemented on 1 May 2022.
The CEPA will cover in excess of 11,000 goods and services, affording more than 90% of Indian goods duty-free access to the UAE. This effectively makes jewellery exports to the UAE competitive once again by eliminating the 5% import duty.
As mentioned earlier, the UAE had been the largest importer of Indian jewellery for decades until the US displaced it as the most important buyer of Indian jewellery in 2021. This has further implications, as the Emirates act as a global gateway for Indian jewellery exports; products exported there are not just consumed by the Indian diaspora but are also re-exported to the Gulf Cooperation Council (GCC) and parts of Africa.
While these are still early days for CEPA, there has already been a visible boost for Indian exports to the UAE. For instance, in the first four months of 2022 – before CEPA was in force – shipments averaged US$2.6bn per month; in the following three months (May-July) jewellery exports rose 30% to a monthly average of US$3.62bn.
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