Shift the gems and jewellery industry from an unorganized to a more organized set up for better transparency
The gems and jewellery sector has been playing a very important role in the Indian economy and in last couple of years the sector has evolved a lot. Jayantilal Challani, founder of 50-years-old Challani Jewellery Mart and President of The Madras Jewellers & Diamond Merchants Association tells Rika Aash Pathak about the future of the gems and jewellery industry.
Q: Being into business of jewellery for so many years, can you tell us about the changes you witnessed in the industry till date?
Over the years, the jewellery industry has been one of the fastest growing industries. Until recently the trend that was followed in Indian jewellery market was of buying jewellery from the trusted neighborhood jewellers. However with the opening up of branded retail in jewellery the trend seems to have evolved whereby increasing number of individuals are opting for branded jewellery. The change in trend is driven by a number of factors such as brand consciousness, choice of designs, consciousness towards hallmarking and certifications of gold and diamond along with a growth in urbanization and increase in disposable income. The world jewellery market in general has witnessed significant changes due to technological innovations over the past century.
Q: How is the gems and jewellery industry affected due to unfair trade policies imposed by the Government?
- Serious issues still continue to plague the jewellery industry since it is still considered to be an unorganized and fragmented sector. The nature of the sector prevents it from achieving economies of scale.
- The Indian Government’s recent decision to hike the import duty twice during the last few years has affected the gems and jewellery industry in a massive way. Due to the increase in the import duty smuggling of gold into the country which did not practically exist before this hike has increased heavily and the income generated from these activities might be used in various illegal activities. The recent increase in smuggling incidents has led to the destabilization of the overall economy of the country.
- Due to the sluggish economy in our country, the skilled artisans are quitting and fleeing from the industry.
- The gem and jewellery sector is also affected by the huge volatility in the exchange rates which make the exports of gem and jewellery less competitive in its key export destinations.
Q: Do you think after elections, the condition of the gems and jewellery industry improves?
The whole industry is highly hoping that the new government would understand the plight of the sector and would encourage, enact and speak positively on the gems and jewellery sector.
Q: What are the problems faced by the Madras Jewellery Industry?
Major jewellery manufacturing centres in south India such as Coimbatore in Tamil Nadu, Thrissur and Kochi in Kerala have been facing acute shortage of gold despite the industry’s claim to have seen a record import of the yellow metal during the last financial year. On the other side, jewelers’ debt is rising because now they have to pay the cost of gold upfront. Earlier, gold was available on lease.
The high cost of importing the yellow metal has also resulted in a rise in illicit gold entering the country. Smaller, local jewellers procure the illicit material at seven-eight per cent lower rates and pass on the discount to their consumers. Analysts say bigger jewellers who buy some of their jewellery from third-party manufacturers may be actually selling some of this gold at their stores as they have no control over the gold procured by these third parties.
Q: As the President of the Madras Jewellers and Diamond Merchants Association, what are the measures taken by the association to deal with the problems faced by the industry?
Our association during my tenure as President has been working closely with the national bodies in making our sector much more organized and also staying united while presenting the difficulties faced by the jewellery industry to the government. As the President, I work with my team to provide effective services to the ever growing needs and requests of its members.
Further the association has been frequently conducting meetings with other jewellery associations to bring out unity and solidarity to prevent the fierce competition and unhealthy atmosphere which is prevailing among the jewellery fraternity.
I believe that the shift of our industry from an unorganized to a more organized set up would result in greater transparency and adaption of higher quality and design standards.
Q: With new technologies and other developments in the industry, what according to you is the future of the gems and jewellery industry?
The Gem and Jewellery Industry is expected to double in size in the next five year and by 2018, we hope and expect that this sector would be considered as one of the most important sectors of the Indian economy and also one of the fastest growing sectors and prove to be a major contributor to employment.
Q: Can you tell us about the business of gems and jewellery in Chennai?
Despite the incline in the gold rates, Chennai has always witnessed that there is a continuous rush and huge demand for the purchase of gold during festive and wedding season.
Chennai has a thriving manufacturing base for gem and jewellery and is a well-known global diamonds and jewellery retail hub. Here the regional variation in customer preference has resulted in the development of specific jewellery clusters, specialising in a particular kind of gold and diamond jewellery design preferred by customers and over the last few years, various types of jewellery art, ranging from Kundan, Meenakari to stone and beadwork which show a wide range of influences Mughal art, modern art, Casting jewellery, Lightweight gold jewellery have emerged as the most favoured jewellery designs by the customers.
Q: Apart from MJDMA, what are the other associations in South India that are working for the welfare of the industry?
MJDMA established in the year 1938 is considered to the parent body of all the jewellery associations in the South. The other major jewellery bodies which work for the welfare of the industry are the local associations, such as the Coimbatore Jewellers Association, the Madurai Jewellers Association, and the Tamil Nadu Jewellers Federation which is the federation of all the jewellers associations.