Weeks after India’s free trade agreement (FTA) with the UAE — a crucial market for domestic jewellers — came into force, Malabar Gold and Diamonds on Friday announced that it would invest Rs 9,860 crore over the next three years. Malabar Group chairman MP Ahammed told FE that the jewellery chain is planning to open 97 showrooms, 60 in India and 37 overseas, by the end of this fiscal. In all, it plans to open 500 new showrooms by 2025, which will create job opportunities for about 11,000 people.
“The FTA will enable Malabar Gold to further enhance and promote the organisational vision using the UAE as its international hub,” he said. At present, Malabar has around 280 showrooms in a total of 10 countries — India, the Gulf Co-operation Council members (the UAE, Kuwait, Bahrain, Oman, Qatar and Saudi Arabia), Malaysia, Singapore and the US. The company will also venture into Africa with showrooms in Egypt, Morocco and Algeria, apart from foraying into Canada and Britain.
On May 1 when the FTA entered into force, Malabar Gold was one of the three exporters to supply to the UAE under the pact. Indian jewellery exporters now get tax-free access to the UAE, which used to slap a 5% customs duty on such products.
As for domestic expansion, Malabar Gold will open more outlets in northern and western India since it already has a solid presence in Southern India, Ahammed said.
It will also focus on tier-2 and tier-3 cities, “where the brand is rapidly gaining acceptance”, he added.
Of the total investments, Malabar is planning to invest Rs 900-1,000 crore in retail expansion in FY23. The latest forecast of a good monsoon has also brightened the prospects of gold sales by jewellers in the domestic market after an 18% drop in the country’s demand of the precious metal (in volume term) in the March quarter. The announcement was made at an investors’ roundtable in Kochi in the presence of commerce and industry minister Piyush Goyal.