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India's gem, jewellery exports seen picking up in 2001-02

India's gem and jewellery exports, which fell last year, are expected to pick up later this fiscal as traders in key markets stock up for the festival season.

"Exports are likely to pick up in July-August and would be at their peak in October-November, before the Christmas season," Sanjay A Kothari, chairman of the Gem and Jewellery Export Promotion Council, said on Monday.

Traders said a slowdown in the US economy hit the domestic industry, since the US accounted for about 38 per cent of India's total exports of gem and jewellery.

India's gems and jewellery exports fell 16.3 per cent to $965.35 million in the months of April and May from $1.15 billion last year.

The drop followed poor performance in the financial year to March 2001, when Indian exports dipped to $7.7 billion, from $8.1 billion a year earlier.

Exports to the US fell 23 per cent in 2000-01 to $2.42 billion but traders said they hope for better sales this year on expectations the economic slowdown might be reversed after a series of aggressive interest rate cuts by the US Federal Reserve.

Exports to the United States as well as other large markets such as Hong Kong and Belgium are expected to pick up in the second quarter of 2001-02, they said.

"Our hopes are based mainly on increased exports to the United States, India's main market for gems and jewellery," said Praveen Shankar, managing director of Revashankar Gems Ltd.

The United States is the largest buyer of Indian gems and jewellery with a 38 per cent share, followed by Hong Kong with 23 per cent and Belgium with 12 per cent.

OTHER MARKETS

India, the world's largest diamond cutting and polishing centre, is exploring other markets such as the European Union and the Middle East, so as to reduce its current excessive dependence on a few countries, Kothari said.

India also has the potential to boost exports of diamond studded gold jewellery, an area on which traders are now concentrating, he said.

"Instead of exporting only diamonds, more and more traders are now putting them on gold ornaments to sell in the global market," Kothari added.

Gold jewellery exports rose to $1.13 billion in 2000/01 from $1.09 billion in the previous year.

Gems and jewellery make up about 22 per cent of India's total exports.

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