Nahh people beginning to hold tangible products (commodities) rather than paper (equities). I can not see this trend broken for a looooong time, in my opinion!
NEW DELHI, Jan 30, 2003 (ODJ Select via COMTEX) -- By Shumita Sharma and Alastair McIndoe
Of Dow Jones Newswires
(Dow Jones)--India's export revenues of gems and jewelry are expected to rise 15% in the current fiscal year due to stronger global demand for diamonds, rising gold prices and the U.S. abolishing tariffs for these products, said Sanjay Kothari, Chairman of the Gem and Jewellery Export Promotion Council, or GJEPC.
However, exports are expected to get off to a slow start in January and February due to a seasonal lull after Christmas buying.
"Buyers look at their stocks after the end of the festive season and like to have some breathing space before they start purchasing," said Kothari. "But we have a target of 15% growth this year."
With gems and jewellery exports accounting for around 17% of total shipments, strong growth in this sector will be a major contributor to the government achieving its goal of a 12% rise in total exports in the current fiscal year, which ends March 2003.
Kothari said the council hasn't yet drawn up its targets for export growth in the 2003-2004 financial year and declined to give an estimate.
Over the past four fiscal years the export trend for gems and jewelry has been choppy, with shipments surging 30% in fiscal 1999-2000 and contracting 4% in fiscal 2000 to 2001.
In the first nine months of the current fiscal year, the sector's exports rose a provisional 26% to $6.3 billion from $5 billion in the same period in the previous financial.
This sector outperformed the growth in total exports, which rose 15.6% in the first eight months of fiscal 2002-2003, according to latest data.
Diamond Exports Sharply Higher
Kothari said the competitive prices of diamonds processed in India have helped the country gain a larger share in the global market for cut and polished diamonds. About 80% of India's total gem and jewelry exports comprise diamonds.
"We have been able to capture some market share from countries such as Belgium and Israel, which are our main competitors in the diamond market," said Kothari.
In 2002, India's share in the diamond market grew to 60% from 55% in the previous year, GJEPC data show. Exports of cut and polished diamonds in the nine month period rose 23% to $4.9 billion from $4 billion in the corresponding year-ago period.
A decision by the U.S. government to exempt Indian gems and jewelry from a 6% import duty has also propelled growth, said Kothari.
The exemption came into effect in August 2002. The U.S. is the largest buyer of Indian gems and jewelry, accounting for 35% of total exports of these products.
Exports of gems and jewelry rose 4% in fiscal 2001-2002, with growth damped by the impact of the Sept. 11 terrorist attacks on the U.S. and the global economic slowdown.
However, a sharp rise in gold prices has helped boost export earnings in the current fiscal year, said Kothari.
"It appears people have started to invest in these items rather than stocks and real estate due to the increase in gold prices," he said.
