Signs of recovery in India's gold jewellery sector
Exports of Indian gold jewellery are improving after falling more than 30% in January, according to data from the Gems and Jewellery Export Promotion Council (GJEPC). The value of gold jewellery exports in February rose by 1% compared with the same month in 2012.
Since April last year, India’s gold jewellery exports have declined by 50%. The modest gains are an indication that gold is becoming more available, despite strict rules limiting imports of the precious metal. “The comfort level of availability of gold has increased and more supplies will come with new banks coming on board,” Pankaj Kumar Parekh, vice chairman of GJEPC, told Reuters.
There’s hope among jewellers that this trend will continue as two days ago the government allowed five private sector banks to import gold. Previously, under rules introduced last year to curb imports, only six banks and three state-run trading agencies were allowed to import the metal, according to a separate report by Reuters. Last year the country’s central bank also introduced an import duty on gold of 10%. Combined, these two measures made it very difficult to buy bullion in India. The government has been trying to reduce gold imports in an effort to tackle the country’s trade imbalance which is driven largely by oil and the yellow metal.
The country was the world`s largest buyer of the precious metal until it ceded that spot to China in 2013. Meanwhile, India’s trade in diamonds and silver has been booming. The country’s exports of cut and polished diamonds rose by 20% over the past 11 months and and silvery jewellery exports by 90% in the same period.