India’s manufacturing industry remains fragmented and unorganised. Only 15-20% of units operate as organised and large-scale facilities; this was less than 10% some five years ago. 55% of manufactured jewellery is handmade by karigars (artisans) who produce intricate pieces, thus sustaining the unique selling point for which Indian gold jewellery is renowned in the global market.
While karigars form the backbone of the Indian gem and jewellery industry, many work in very poor conditions and a large number are underpaid as compared to many other industries, earning between Rs15,000 and Rs16,000 (US$190-200) per month.
Mandatory hallmarking became effective on 16 June 2021 and applies to six purities: 14k, 18k, 20k, 22k, 23k and 24k. Its introduction will create a level playing field in terms of purity and enable retailers to focus on differentiation through design and customer service. These moves are likely to remove some of the barriers to purchase among young consumers, which in turn should support demand.
National and regional chain stores will continue to gain market share because of their access to credit and the large inventory they are able to carry. And as many of these players look to open businesses in Tier 3 and Tier 4 cities, they should find a certain level of aspirational demand that they can tap into, allowing them to gain market share quickly.
Conversely, if smaller players are not able to meet accepted standards of transparency their access to credit will be limited, as banks and financial institutions remain wary of lending to the gem and jewellery sector.
Heera Zhaveraat (HZ International) A Diamond, Watch and Jewellery Trade Promotion Magazine provide dealers and manufactures with the key analytical information they need to succeed in the luxury industry. Pricing, availability and market information in the Magazine provides a critical edge.
