Fearing more hard-hitting measures by the government to control the demand for gold and related products to check the burgeoning current account deficit (CAD), jewellers have started wooing policy makers and consumers.
Between March 2012 and this February, the government had raised the import duty six-fold on gold. Apart from lobbying policy makers and building ties to consumers, the trade is also wooing banks, to ease its terms of credit. The Gems and Jewellery Export Promotion Council (GJEPC) is organising a day's Banking Summit here, on Wednesday.
"The major objective of this event is to strengthen banks' confidence towards the diamond processing industry. The industry wants Indian banks to play a more pro-active role in finances to diamond processors," said Sanjay Kothari, an industry veteran and ex-chairman of GJEPC.
Banks now actively finance large entities, the major measure being if they are authorised bulk purchasers from De Beers, the world's largest purveyor of rough diamonds. Yet, say industry sources, a number of small entities have a better business record and banks should evaluate the performance of even small players in global markets.
"A number of them have availed working capital funds from Indian banks and overseas banks, and repaid with credibility," said Kothari. He said many Indian banks view such entities with suspicion when they apply for working capital, when this is unwarranted. Instead of the 15-20 per cent collateral from those recognised by De Beers, banks seek 100-120 per cent collateral from small players as a normal practice, it appears.
Banks apart, jewellers are also focusing on designs to attract customers who'd otherwise, they feel, abstain from fresh purchases amid expectation of a further price fall in the coming months. Gold prices have fallen by three per cent since the beginning of this year to trade at the current Rs 28,500 per 10g in India after a high of Rs 31,250 per 10g in the last quarter of 2012. The price in London has fallen from a little over $1,900 an ounce last year to $1,600 an oz now.
The Imitation Jewellery Manufacturers Association (Ijma), with New Media Communications, is organising Fashion Jewellery and Accessories Show 2013' between April 4 and 7 in this city, to attract customers towards the craftsmanship of Indian designers.
With traditional styles and contemporary designs, imitation jewellery is becoming the choice of a growing number of consumers in India. Also, over the years, the trend of fashion has shifted from traditional to imitation jewellery, for various reasons. The finest feature of imitation jewellery is that manufacturers can work wonders in styling and design, said Nagendra Mehta, secretary of Ijma.