The India-UK free trade agreement (FTA) has heralded a wave of optimism within the gems and jewellery sector as industry experts predict robust growth in exports and a much-needed boost to employment.
UK’s Import
The UK annually imports approximately USD 3 billion worth of jewellery, which unlocks a massive opportunity for India’s gems and jewellery players, whose current UK exports are valued at USD 941 million, of which USD 400 million comes from the jewellery segment.
In a statement, Chairman Kirit Bhansali of the Gem & Jewellery Export Promotion Council (GJEPC), said, “With the duty concessions in place, the figure of USD 941 million is poised to surge to USD 2.5 billion within the next 3 years, elevating overall bilateral trade in our sector to an estimated USD 7 billion.”
The UK previously imposed an import duty of up to 4% on India’s gems and jewellery products. With this duty being removed, exports are expected to double in the next 2-3 years. Alkesh Shah, Vice Chairman of Goldstar Jewellery, predicted a major boost in sales for the coming Christmas season, stating, “Sales for gems and jewellery will easily grow by 15-20% come December, followed by exponential growth in the coming years. We already have enquiries and new orders from clients in the UK, which will increase in the coming season.”
The FTA also gives India an edge over competitors like China and Thailand, which still face a 2-2.5% import duty on finished jewellery.
According to Alok Sonkia, President of the Jewellers Association Jaipur, the order book for gems and jewellery products in the mid and lower segment (valued at USD 1,000 and below) will increase considerably. “While it is too early to say how much the order book will grow by, this segment is set to benefit the most in the UK market.” He also noted that products in the mid-to-high-end segment, valued between USD 2,000 and USD 5,000, will also see a growing demand given India’s manufacturing capability and reduced prices for UK buyers.
Retail jewellers such as Tanishq, Kalyan Jewellers and Malabar Gold & Diamonds will also gain access to a wider market, as stated by Sabyasachi Ray, Executive Director of the GJEPC. “Similar to the India-UAE Comprehensive Economic Partnership Agreement (CEPA), which resulted in Titan set to acquire a 67% stake in UAE-based Damas Jewellery, you can expect India’s retail jewellers to exponentially increase their retail footprint in the UK. It will also boost the diamond exports, which have been facing headwinds lately.”
Jewellery sector
India’s gems and jewellery sector hires over 5 million people. Dinesh Lakhani, Group Director at Kiran Gems, hailed the agreement’s benefits for the sector, saying, “From designers to artisans across India, there will be a considerable boost in employment as orders from the UK will continue growing.”
Prominently, Surat’s diamond cutting & polishing industry will gain greater access to the UK market, along with Jaipur’s gemstone, goldsmith and heritage jewellery segment.