The Future of India’s Jewellery Industry: Insights from Vipul Shah
As the Indian jewellery industry gears up for Budget 2025, Vipul Shah, the head of the Gem and Jewellery Export Promotion Council (GJEPC), has shared his insights on the sector’s aspirations and challenges. In a recent interview with ET NOW Swadesh, Shah reflected on the previous budget’s positive outcomes and outlined the industry’s key requests for the upcoming fiscal plan.
Acknowledging Past Support
Shah began by expressing gratitude towards the Finance Minister for the approval of several industry proposals in the last budget, which significantly benefited both the land and jewellery sectors. He highlighted the reduction of duties on gold and silver, which has led to a marked improvement in business conditions. “Duties on gold and silver have been reduced, which has improved business,” Shah stated, emphasizing the positive impact of these changes on the domestic market.
The Push for Platinum Duty Deductions
Looking ahead, Shah noted that the jewellery industry is advocating for a duty deduction on platinum, similar to the existing provisions for gold and silver. Given the rising demand for platinum, this adjustment could further stimulate growth in the sector. “We have recommended that duty drawback in all semi-preparations should be similar to gold and silver,” he explained, expressing hope for a favorable response from the Finance Minister.
Growth in Domestic Market and Job Creation
Shah also pointed out the significant growth in the domestic jewellery market, fueled by an increase in new Initial Public Offerings (IPOs) and foreign direct investments (FDIs). He projected that around 3,000 new retail locations would be launched over the next two years, creating substantial job opportunities. This expansion reflects the industry’s resilience and potential for continued growth in the coming years.
Infrastructure Development: Mumbai’s Jewellery Park
One of the most exciting developments in the jewellery sector is the creation of Mumbai’s largest jewellery park. Shah believes this initiative will greatly stimulate the industry and enhance infrastructure. Plans are also underway for similar parks in Meerut and Bangalore, aimed at further bolstering the jewellery ecosystem in India. These parks are expected to provide a centralized hub for manufacturing, design, and retail, fostering innovation and collaboration within the industry.
Clarifying Safe Harbour Rules
Shah addressed the need for clarity regarding the Safe Harbour Rules, which are crucial for the sector’s growth. He mentioned that the industry has specific questions that require answers before fully engaging with mining companies. “Once we get the answers to those queries, we will go after it and invite all the mining companies as well,” he stated, highlighting the importance of regulatory clarity in attracting investment.
Challenges in the Diamond Industry
The diamond industry, however, faces its own set of challenges. Shah stressed the necessity of a marketing budget for consumer education, particularly in light of the growing presence of lab-grown diamonds in the market. “We have recommended a marketing budget for consumer education to protect consumers, especially with the presence of lab-grown and natural diamonds,” he noted, underscoring the need for informed consumer choices.
Outlook on Gold and Silver Prices
Looking towards 2025, Shah expressed optimism regarding the prices of gold and silver. He predicted that gold prices could rise to $3,000, driven by increased central bank holdings and rising consumption rates. “I feel that in 2025, I will not be surprised if the price of gold reaches $3,000,” he remarked, indicating a bullish outlook for precious metals.
In contrast, Shah believes that diamond prices have stabilized and will gradually increase as natural material extraction declines. “The price of diamond has stabilized now, and as mining decreases, its price will increase,” he explained, suggesting a positive trajectory for the diamond market in the long term.
Conclusion
As the jewellery industry prepares for Budget 2025, the insights shared by Vipul Shah highlight both the challenges and opportunities that lie ahead. With a focus on duty adjustments, infrastructure development, and consumer education, the sector is poised for growth. The optimism surrounding gold and silver prices further underscores the potential for a vibrant future in India’s jewellery landscape. As stakeholders await the upcoming budget, the collective hope is for policies that will continue to support and elevate this vital industry.
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