Detailed Project Report on gold jewellery (eou)

Gems and Jewellery Industry in India

The Gems and jewellery sector has a huge market in India and abroad alike. This market encompasses various kinds of jewels including gold, coloured gemstones, costume jewelleries, platinum and diamonds. The sector is expected to register a compound annual growth rate (CAGR) of 13 per cent during 2011-2013, according to a report “Indian Gems and Jewellery Market Forecast to 2013,” by research firm RNCOS.

The RNCOS report came out in the year 2010, and was indirectly supported by the findings of a leading industry body and published in the same year. The growth rate of the gems and jewellery industry in India stands at 15 per cent, while the domestic jewellery market was worth US$ 16-18 billion. As far as exports are concerned, this sector constitutes more than 12 per cent of the total exported products. The journal estimated that by year 2015 the gems and jewellery sector will help India earn about US$ 25-35 billion in form of export revenue. A steady sale of jewelries, especially of gold, has helped the gems and jewellery industry in India flourish at this rapid rate. Moreover, people are also investing their money in gold as a future recourse to counter tough times. In addition, India has evolved as a great place for diamond processing, according to the industry body.

Gems and Jewellery Industry in India: Industry Structure

Gold is the principal raw material for making jewellery in India. In 2007 gold had a market share of US$ 12.24 billion (Rs 550 crores), while diamond had a market share of US$ 2.56 billion (Rs 115 crores). Eighty per cent of the gems and jewellery industry in India is dominated by gold and the rest is controlled by diamond and gemstone industry. This trade in India is mainly fragmented as 96 percent of total business comes from unorganised sector.

Gems and Jewellery Industry in India: Gold

The importance of gold in the Indian gems and jewellery sector is significant. In the year 2008 India had a gold consumption rate of 24 per cent, according to the report “Indian Gems and Jewellery Market Forecast to 2013,” by research firm RNCOS.

This made the country become a leader in the table of most gold consuming nations with the consumption amounting to about 16,000 tonnes. The other key markets include Japan, China, Turkey, Italy, USA and UK. It is expected that the Gems and Jewellery industry would enjoy agrowth of about 8.5 per cent in the period upto 2015. It is also estimated that about 600 tonnes of gold is used to make jewellery.

Gems and Jewellery Industry in India: Diamond

Currently India is the major polishing and cutting hub for diamonds. India is also the third largest consumer of polished diamonds. The surge of urbanization and rapidly growing middle class in India has led Indian consumerism to new heights, particularly in the diamond jewellery sector. Every 11 out of 12 diamonds sold around the world are processed in India regardless of the place they are mined.

When it comes to export in the year 2006-2007 Indian gems and jewellery industry made exports worth US$ 17.1 billion. During the 2007-2008 time periods this number rose to US$ 20.88 billion, which meant a growth rate of 22.27 per cent. Of this total export about 26.91 per cent were gold jewellery, whole diamond jewellery constituted 70.59 per cent of the total number. During the first part of the 2008-09 fiscal period the export rate rose by 17 per cent and reached US$ 9.05 billion, and by the end of 2009 the export reached US$ 25.11 billion. In the year 2010 this grew even further and reached US$ 37.14 billion. Majority of the gems and jewellery products from India are sent to the US and European markets constitute about 60 per cent of India’s gems and jewellery exports. Indian exporters are also exploring other new markets including South America and East Asia.

The statistical calendar year, 2011 shows that the gems and jewellery industry in India has exported products worth US$ 6659.27 million till the month of May.

During the April-May period of 2011, gold jewellery export reached US$ 2264.53 million, while polished and cut diamond export was recorded at US$ 4259.70 million. This meant that both these segments have increased their growth rate even further. While the diamond processing segment has grown at the rate of 12.97 per cent, the gold jewellery segment has recorded a growth rate of 19.87. The coloured gemstones segment too has recorded an increase in profit compared to the last year and has earned US$ 44.65 million with a growth rate of 19.42. Rough diamonds consists of three per cent of the total export ration of Indian gems and jewellery industry.

Gems and Jewellery Industry in India: Government Initiatives

While presenting the budget 2009-10 in Lok Sabha, Mr. Pranab Mukherjee, the Union Minister of Finance, announced an increase in custom duty on gold and silver as the price of gold has increased manifold.

Gold bars currently attract customs duty at the specific rate of Rs 100 per ten grams while other forms of gold (excluding jewellery) are chargeable to a duty of US$ 5.63126 (Rs 250) per ten grams. These rates were fixed in 2004. Along the same lines, the customs duty on silver (excluding jewellery) will be increased from US$ 11.2625 (Rs 500) per kg to US$ 22.5251 (Rs 1,000) per kg. These revised rates would also apply to gold and silver, including ornaments that are not studded, when imported by a bona fide passenger as baggage, he said.

Gems and Jewellery Industry in India: Road Ahead

The huge growth of the Indian gems and jewellery industry has seen the advent many new branded jewellery shops in various metros of this country. Brands such as, Damas Jewellery, Reliance Retail, Swarovski, and Joy Alukkas are either opening or have already opened their new branches. The availability of cheap labour and presence of well skilled people in various states of India is helping in the growth of diamond polishing and gold jewellery markets. According to experts in the jewelry industry the surge in demand for expensive jewellery in India is a result of the strengthening Indian economy. India will soon overtake the US in the not so distant future, according to a statement given by Rapaport Group, the well known keeper of global diamond related data.

GOLD JEWELLERY (EIRI-1036)

Cost Estimation

Plant Capacity                                     500 GMS./Day
Land & Building (Area 500 Sq.Mt.)  Rs. 80 Lacs
Plant & Machinery                               Rs. 65 Lacs        
W.C. for 1 Months                                Rs. 4.13 Cr.          
Total Capital Investment                    Rs. 5.66 Cr.             
Rate of Return                                      125%  
Break Even Point                                  19%

•    EIRI can modify the Capacity of the Project and Total Capital Investment as per your requirement.
•    Note: The project investment cost and capacity are subject to change without any notice. Future projects may have different values of project cost and capacity.
 

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