REVIEW OF LITERATURE AND RESEARCH METHODOLOGY
REVIEW OF LITERATURE
Review of literature of a subject is helpful in understanding the
conceptual framework and provides a detailed account of work which
was done in the past on that particular subject. It proves helpful to the
candidate in deciding the line of action to start his research study.
Keeping in view all these facts a review of existing literature has been
made by the researcher.
According to Pawan Kumar Garga1, “India’s up-coming
jewellery industry has two closely defined sectors: the export processing
Zones (EPZ,s) comprising 100 percent export-oriented units, and the
domestic tariff area (DTA) which caters not only to domestic needs but
to international markets as well. In fact, the DTA accounts for as much
as 63 percent of India’s jewellery exports. Liberal concessions from the
government have been applicable to EPZ’s since their inception in 1974;
but gradually, the concessions are being extended to the DTA. In a
couple of year’s time, there will be no distinction between the two
sectors as far as official incentives are concerned. The bulk production
from the DTA comprises of handcrafted jewellery. Hand Crafted
jewellery is in the high-price range and is for those who can afford
exclusive and exquisite pieces. These are considered prized possessions
because of their artistic and intrinsic value; and may be worn rarely or on
special occasions. EPZ specialize in mass-produced jewellery. It has a
1 Pawan Kumar Garga, Export of Inda’s Major Products-Problems and Prospects, New Century Publications, Delhi, 2002, p. 90-91.
32
vast and growing market and is for those who go in for the
comparatively lower priced varieties for day-to-day wear. In India, the
demand is for heavy gold jewellery; whereas women of the west prefer
the more delicate type of jewellery which is studded with diamonds and
colored gemstones. There are about one million artisans engaged in
manufacturing jewellery in India. Of those 90 percent are located in the
DRA, manufacturing plain gold jewellery as well as diamond studded
jewellery.
The product group of gems and jewellery comprises of diamonds,
coloured gemstones, gold jewellery, pearls, non-gold jewellery, synthetic
stones and costume/fashion jeweller. In the total exports of gems and
jewellery, diamonds alone account for 80 to 93 percent share. The
diamond cutting and polishing industry in India was revived in early
sixties after remaining dormant for over two centuries. The diamond
cutting and polishing activity witnessed a rapid development and a major
break-through came about in the decades of seventies and eighties. This
breakthrough is mainly due to liberalized policy relating to export effort
of this sector, increased world production of rough diamonds, supportive
role of the Diamond Trading companies in effecting supplies of rough
diamonds and expanding world demand for diamond studded jewellery.
The diamond industry in the country is located in and around Jaipur,
Surat, Bhavnagar, Navsari, Tiruchirapalli, Bombay, Pundra, Varanasi,
Delhi and Lucknow. Jaipur in Rajasthan has been and important centre
for cutting and polishing of colored gemstones. It has been a renowned
centre for cutting or emeralds in the world.”
33
Rai Govind Chandra2 describes about Indian Jewellery prior to
advent of the Greeks, “Indian love for jewellery is proverbial. Through
the ages the Indian genius has produced the most gorgeous, the most
intricate, the finest and the noblest affects I jewellery. The ornaments
found at mohaenjodaro, Harappa , Chandudaro, Lothal, Rupar, Kali
Bangan all testify to the high degree of craftsmanship of the Indian
workmen of the proto-historic period. One indeed marvels at the
delicacy and the finish of the jewellery found in the Indus Civilization.
There are numerous pieces to decorate every part of the body and all of
them are charming and beautiful. They are in no way inferior either in
workmanship or in design the the contemporary jewellery of Sumer or
Egypt. Along with these pieces there are proofs of the jeweler’s
handiwork on the Indian icons discovered in various excavations of this
early civilization. Even the ephemeral clay sculptures have not escaped
from being adorned with jewellery. We find male and female figurines
wearing metallic bands on their heads, earrings, necklaces, bracelets and
girdles. A bronze foot found a Mohenjodaro has a beautiful anklet and
some of the terracotta figurines appear to be wearing bangles on their
ankles.”
Shitla Prasad Tiwari3 explains that with the passage of time, as
civilization advanced, we notice an all round change regarding the quest
for jewellery which is displayed more and more by women alone. The
change in the outlook, the desire or the liking for jewellery and its
acquirement especially by the women-folk, is once more noticed all over 2 Rai Govind Chandra, Indo Greek Jewellery, Abhinav Publications New Delhi, 1979, p. 18. 3 Shitla Prasad Tiwari-Nupura the anklet in Indian literature and Art, Agam Kala Prakashan, Delhi, 1982, p. 24-25.
34
the world. It is from this point onward that the gentle-sex, desirous
always of pleasing and therefore presenting itself in an elegant and
ornate form has even sought to add to its charm by adorning itself with
jewels. The effort of the male-sex, which has always been a lured by the
ornate beauty of the fair-sex, was also directed towards the end of
acquiring more and more jewels for his beloved ones the marks of this
all-round adornment of the beauty are visible in the art, literature and the
craft everywhere. In the field of plastic arts, it is seen in the ornate forms
of female sculptures decked with a number of ornaments covering
themselves almost from top to bottom. In the field of literature,
particularly the Sanskrit literature of India, the poets are never found
tired in describing their beauties with so many figures of speech or
Alamkar in Sanskrit is explained by the Rhetoricians with the help of
actual ornaments like kataka (the armlet) or Hara the Necklace. It is said
that the almakaras in literature are there to serve the same purpose of
adding charm to individual part of a body of an expression that is
otherwise added by the ornaments to the body of a person. As regards
the craft, the whole history of the jewellery and the ornaments all over
the world, presents a good testimony to this effect. All the countless
records of the gems, jewels and the ornaments along with the efforts of
the individuals who acquired them and the workmanship of the artists
who fashioned them equally bear out the same fact. Thus, the all round
activity of man was motivated by the only human instinct of making the
fair-sex look more beautiful, mere imposing or more striking by
ornamentation.
35
Rakhee Rani4 in her research project on a comprehensive study
of income generation of workers of gold ornament with special reference
to Meerut City found that savings of variety of karigars are different in
all respect and vary from Rs. 2500 to Rs. 25000. The income is divided
on the basis of nature of work for example those workers who are
involved in bangles, rings, and earrings they are getting more
remuneration as compared to those who are just involve in making balls,
wire and polishing work. Generally the manufacturer are getting their
jewellery made on orders only. This work is basically done on contract
basis and jewellers also provide gold to complete the design. This gold is
provided by the jewellers to the karigars to get the variety of jewellery
i.e. 68, 76, 80 tanch etc. The wages to the karigars is paid in term of
gold.
In jewellery making 22 carat gold is used but still the purity is of
91.6 is guaranteed in it. The brightness of this gold is a bit less. The
designing of 22 carat gold ornament is made attractive by Rodiayam
Polish. 18 carat gold is only used in making diamond jewellery. 17 carat
gold is very hard that is the reason that the designing work is very
difficult in this case. This carat of gold is generally not used in jewellery
manufacturing.
According to report published in Jewellery Bhavisheya5
pertaining to the exports of gems and jewellery for the period of August
2010 as compared to the same period last year, the overall exports of
gems and jewellery at US$ 3,155.14 million (Rs. 14693.49 Crore) is 4 Rakhi Rani:A Comprehensive study of income generation of workers of gold ornament with special reference to Meerut City- a project submitted to CCS University,2006 page 45-46. 5 A report published in Jewellery Bhavisheya, Modi Nagar,volume 6, No. 11 December, 2010, P. 22.
36
showing a growth of 67.44% (61.31 % in rupees term) as compared to
US$ 1884.30 million (Rs. 9,108.72 crore) of same period previous year.
The overall export of cut and polished diamonds at US$ 2,301.77 million
(Rs. 10,719.32 crores) in the month of August 2010 is showing a growth
of 65.24% (59.19% in rupees term) as compared to US$ 1,392.99
million (Rs. 6,733.70 crores) for the same period of previous year. The
provisional export of gold jewellery for the period August 2010 at US$
527.04 million (Rs. 2,454.44 crore) shows a growth of 49.61 percent
(44.13 percent rupees term) over the comparative figure of US$ 352.27
million (Rupees 1,702.89 Crore) for August 2009. The Export of
coloured gemstones at US$ 28.66 million (in rupees 133.48 Crore)
shows a growth of 14.05 percent (9.89 percent in rupees term) during
August 2010 as compared to US$ 25.13 million (rupees 121.47 crore) in
August 2009. In a recent development the government of India has
revised ‘all industry Rates for duty Drawback’ on precious metal gold
and silver jewellery that is meant for export purpose only. The revision
was announced through a notification on September 17, 2010. The rates
have been made effective from 20th September 2010.
In the opinion of M. S. Shukla6 Much of the Indian jewellery has
persisted to culture traditionally cherishing and adverting to its prized
consummate forms and former masterpieces of design and technique. Its
motifs, patterns and styles have generally remained unchanged and
changes if any have stayed far from radical and drastic. It has retained its
customary character and models at Cambay, for example, and been
created with traditional tools and technology that have been employed
6 M.S. Shukla, Panorama of Gems and Jewellery in Indian historical Setting, Kala Prakashan, Varanasi, 2000, p. 159.
37
for centuries. The rough bead forms are smoothed by finer chipping,
then ground smooth, drilled and polished. The only changes are marked
in the limited range of shapes and grinding and polishing being done
mechanically. The other Indian manifestation of jewellery, though
broadly conventional, has maintained their variety along with aura of
beauty and superbness cultivated indigenously over millennia.
In his article Easther Bardhan7 mentioned that the Gems and
jewellery sector is facing several challenges and opportunities. These
challenges are reflected in form of hurdles in sectoral development,
barriers bankers face in financing the industry and lack of solutions
provided by professional service firms. The diamond processing industry
took birth in 1960, when the synthetic industrial material trends head
edged out the demand and prices of industrial demands. At this point the
labour available in India proved to be cheaper than the labout in
Belgium, resulting in affordable diamonds for less affluent buyers. In
1960 the story of fragmentation began with the big players becoming
bigger and small players shrinking in microscopic level. This
complementary phase has been transforming to show the chequered
realty of present times. Rough diamond cannot be processed in absence
of proper finance. The major reason why 12 out 13 diamonds are cut and
polished in India is the presence of strong banking support, which fuels
the growth in the export segment. Banks provide various credit facilities
and packages to the gems and jewellery sector, specially dominating the
export segment. Fragmentation is an inherent problem as it restricts
domestic growth in terms of upgraded technology, global business
practices, organized setup and also in terms of funding. The major 7 Easther Bardhan, Economic Times, September 11, 2007.
38
barrier banks face while financing the jewellery sector is that almost 80
to 90 percent are the jewellery units are family-owned. Family units
gave room to practices like fake balance sheets and parallel book
business which might lead to double financing.
The sector is also fighting with the dependence on imports and
lack of technological expertise. There unexplored reserves of gems in
Orissa, MP and AP, yet figure shows that the import have risen by 10
percent from 6.3 percent in 2004-05. This rise in import is ultimately
resulting high inventory carrying cost. Hence it is essential to take
unique approaches to address industry needs and increase dialogue
between industry and service providers.
According to an article published in Golden Times8, “Gold is the
only thing that seeps into every strata and class of the Indian society, is
equally sought by the well-heeled urban businessman and the poverty
stricken rural labourer. Indians see the metal as a symbol of purity,
prosperity and fortune. Indian customs demand buying gold for special
occasions like wedding, births, birthdays and celebrating various
festivals or offering gold to Indian deities. According to Rig Veda,
India’s most ancient text, the giver of gold is blessed with life of
radiance and grandeur; for giving a receiving gold is synonymous with
welcoming the Goddess Laxhmi. Gold is, hence, invariable purchased
all over India during Diwali-a festival celebrated by one and all.
Gold to Indians is that ultimate love object. Not only does it adorn
our bodies it also acts as a good investment and is therefore, also
8 Gold is much beyond jewellery- an article published in The golden times, The Economic Times, September 30, 2008.
39
ancestral. From mother to daughter to granddaughter, father to son to
grandson gold has the tendency of getting passed down from generation
to generation. So far Indians at least, gold will never lose its sheen. In
fact, the mentality is so possessive for gold that it will be sold as a last
resort only and before most of the other assets are liquidated. Indeed the
cultural and emotional significance attached to gold is such that
purchases made during times are personally important, regardless of
price.”
According to Nirmal Bardia9 convener, Jaipur Jewellery
Association “Jaipur’s Colour stone industry has a major contribution in
the country’s export of colored gems, hence we need shows to focus the
developments in this area. Also, the month of August is a good period
for trading as Marriage and festival seasons closely follow. Jaipur has
enough potential for multiple shows. Since Jaipur Jewellery Association
(JJA) and Jewelers Association Shows (JAS) both are directed towards
growth of the industry, there is no rivalry between the two. Jaipur’s
gems and jewellery industry keeps busy over 100000 artisans,
manufacturers, importers, dealers and exporters. The city is traditionally
known to be the hub of colour stone. Nevertheless, emerging
international centers have taken away considerable share of business
from the industry here. Optimistically, initiative like shows and
exhibitions will help to boost opportunities by attracting global buyers
and exhibitors.
9 JAS 2007; A message delivered in the show of jewellery association by the convener Mr. Nirmal Bardia. Published in a magazine Diamond World. Vol-34, No-3., 2007, Page 46
40
According to Jewellery Design and Technology Institute,
Noida10 it is its firm believes that – if one cannot make jewellery, one
cannot design jewellery. And according to them an important addition is
required to be made in the field of Jewellery Manufacturing. A
beginner’s course in Jewellery Manufacturing techniques should be
introduced in which the students learn how to work with machines and
use different types of hand tools on well equipped workbenches.
Students practically learn the technical aspects of jewellery making
which is imparted through experimenting with various techniques. At the
end of the course the students work on a manufacturing project and
create various items of jewellery such as bracelets, chains, charms,
earrings, rings, cuff-links, tie chains, Brooch, pins, pandants etc.
In his book Rai Govind Chandra11 stated that the first phase of
Indo-Greek jewellery appears to have begun when Greek settlers of the
new cities established by Alexander round about 300 B.C. began to turn
out beautiful Pieces. Naturally at first there must have been some
resistance on the part of Indian craftsmen to adopt the western motifs
during the first few years, and the Indian jewelers must have continued
to make pieces after their own designs. Therefore, during this period two
types of jewellery were manufactured, one wholly Indian and another
Greek. These two sets are perfect examples of their respective arts.
Later, however when the demand for Greek type of jewellery increased,
the Indian craftsmen also began to turn out copies of Greek models. This
must have happened during the first century B.C. examples of such
10 A Survey Report released by the JDTI Jewellery Design and Technology Institute, Noida. Published in Diamond World, March-April Edition 2007.Page 174. 11 Rai Govind Chandra, Indo Greek Jewellery, Abhinav Publications New Delhi, 1979, p. 95and109.
41
jewellery have been found at Taxila and other places. Later these motifs
began to be introduced in Indian jewellery in the 1st and 2nd century
A.D. their designs bespeak of the new impulses form the west and in
their changing patterns is hidden the history of this period.
The function of the jeweller in the manufacturing of jewellery
must have remained the same as it was during the proto-historic period.
They would have worked out the design of the ornament according to
the wishes of the customer or copied the forms of existing pieces, and
passed them to the craftsman for making them. It is possible that they
would have supplied the precious metals and the stones to the artisans as
he does today because the craftsmen are generally immobile and do not
go out in search of the customers or to find out the various metals and
stones needed for making jewellery. It is the jeweller who performs this
function. He keeps the stock of the raw material and invests money in
the finished products. When the season is slack he gets pieces of
ornament made from the craftsmen and keeps them for ready sale. The
sources of the various raw materials must have been kept a closely
watched secret of the jeweller in those early days as it is even today.
This knowledge would have formed his assets.
Nitish Deb12 concluded in his research that as far as the question
of Uttar Pradesh economic and financial prospects are concerned Uttar
Pradesh is not only a geographical unit but it also consists a vision, vast
traditions and lifestyle. In Uttar Pradesh export is increasing at the rate
of 15% per annum. In the year 2004-05 total export of Uttar Pradesh 12 Nitish Deb “Role of Gold ornaments in export trade of Uttar Pradesh after liberalization with special reference to district Meerut”, 2005, pp. 253-259.
42
Increased by Rs. 23059.95 Crore whereas the total export of India in
the same period was Rs. 33739.05 Crore. In this way the total
contribution of Uttar Pradesh is about 7% in the total export of India. In
total export contribution of Uttar Pradesh Gems and Jewellery industry
contributed Rs. 274.26 Crore. In this way there is a significant increase
in this regard. There is no authenticated data about jewellery export
available in Meerut District. But on the basis of data collected through
the survey total jewellery export is about Rs. 100 Crore per annum. India
is the largest consumer country in the world because the 20% of world’s
total gold jewellery is absorbed in India itself. As per the study there was
a total consumption of Rs. 285 per person in India whereas India comes
at the lowest stage. Gold production is not at very significant level in
India. India produces only 9% gold of its total demand. In India people
are very much interested in gold collection as an investment option. As
per world Gold Council in India there is about 10,000 tons gold is stored.
In India, Delhi and Mumbai are the main centers for Gems and
Jewellery.
Gold is a precious metal which is found any time and everywhere.
It said that gold is even found at small cottages and in huts. Every Indian
woman has at least some thing made of gold. Gold is produced as
mineral and passes out with many stages to reach at its final
consumption stage. 80% of total gold is used in manufacturing jewellery,
15% of total gold is used in other industrial uses and rest 5% is used for
investment purposes. Gold is all time favorite to all for its virtue. In
India gold is considered as a good alternative of investment. It is termed
as a symbol of prosperity and a good friend in once bad time. On the
other hand it is considered bad and unproductive. Presently the work of
43
jewellery is centered to a very little part of Meerut and restricted to few
families only. There are about 80 units of gold jewellery actively
participating in this field as a retailer whereas about 200 units are
performing like a cottage units. There are about 35000 karigars involved
in jewellery manufacturing who produce about 100 kg. Gold and 200 kg.
silver jewellery per day. About Rs. 100 crore Capital is invested in this
industry.
In Meerut, Gems and silver jewellery is popular as well. But there
is a very limited usage of other metal like copper, brass and gilt. Just of
give growth to the gold jewellery industry and to increase the export of
gold jewellery a gold city proposal is proposed, which will give strength
to the development of jewellery industry.
Export of jewelry is a complex exercise. To bring people here for
export oriented activity there is a special need of training and awareness.
There is an increase in the export of jewellery day by day. In the year
2004-05 there was a total export of Rs. 5240.24 crore from Meerut
whereas the total export of Uttar Pradesh was Rs. 23059.95 crore. In the
year 2003-04 jewellery export was Rs. 274.26 crore and in the year
2002-03 Gems and jewellery export was just Rs. 155.29 crore where as
the total export in that year was Rs. 14455.59 crore. It shows a
significant increase in the export of jewellery business. In this way Gems
and jewelley contributes near about 17% to the total export of India as a
whole. In the year 2004 there was a total consumption of 520 tons gold
Jewellery in India which was about 20% of the world consumption. The
proposed model of gold city is a necessity in itself and there is a great
need for its establishment.
44
As per a report published in Marketing Mastermind13 “India
possesses world’s most competitive gems and jewellery market due to its
low cost of production and availability of skilled labour. As per this
report “Indian Gems and Jewellery Market - Future Prospects to
2011”, highly skilled and low cost manpower, along with strong
government support in the form of incentives and establishment of SEZs,
has been the major driver for the Indian gems and jewellery market. The
market also plays a vital role in the Indian economy as it is a leading
foreign exchange earner and accounts for more than 12% of India’s total
exports. Currently the Indian market remains highly fragmented, but is
rapidly transforming into an organized sector.
Currently, the industry is facing a slowdown due to global
economic turmoil. But due to various government efforts and incentives
coupled with private sector initiatives, the Indian gems and jewellery
sector is expected to grow at a CAGR of around 14% from 2009 to 2012.
At present, the Indian gems and jewellery market is dominated by the
unorganized sector; however, the trend is set to change in near future
with the branded jewellery market growing at an expected CAGR of
more than 41% in the coming four years. With its consumption pegged
at nearly 20%, India remains world’s largest gold consumer and this
share is expected to grow further. By analyzing past and future aspects
of the market, the report highlights the potential growth areas in the
market and gives an overview on the market for gems and jewellery in
the country. It also evaluates the emerging trends in the concerned
industry. 13 Marketing Mastermind: “Indian Gems and Jewellery Market - Future Prospects to 2011” the ICFAI University Press. June 2009.
45
The report also covers the industry forecast and analysis based on
various macro and micro economic factors, sector and industry specific
databases, statistical and analytical models. This model takes into
account the past and current trends in an economy and more specifically
in an industry to bring out an objective market analysis.
According to a survey report published in GJF News14
“Mumbai’s gold trade is fast losing out to Gujarat and Rajasthan.
Though official gold prices in the city are much lower than those coming
in from the two neighboring states, actual purchases prices are higher on
account of value added tax (VAT). VAT is not included in the official
prices of Mumbai gold. In Gujarat and Rajasthan, only sales tax is
applicable as these states have not yet accepted VAT. Perhaps for the
first time, there are two prices of gold being quoted in Maharashtra.
Gold in non-VAT states is still subject to sales tax at 0.25 per cent,
which is far lower than the one per cent levy under VAT Maharashtra.
While sales tax is included in the official prices quoted in the non-VAT
states in Maharashtra, the official price of gold stands lower since the tax
is added as a separate component to the quoted price, which makes the
actual price higher than at the official ones. Due to this, Maharashtra
continues to be a loser in the bullion trade as Gujarat and Rajasthan have
not adopted the VAT system and their gold is cheaper.
14 GJF -A News Letter of All India Gems and Jewellery Trade Federation-“ Mumbai loses gold race to Gujarat and Rajasthan. Vol. 1, issue-1, 2005.
46
Pawan Kumar Garga15 stated that Gems and jewellery
comprising diamonds, coloured Gemstones, gold jewellery, pearls, non-
gold jewellery, synthetic stones and costume/fashion jewellery constitute
a growth potential export sector. Export of all items of this product
group taken together have increased phenomenally during the last fifteen
years net exports to Rs. 33,734 crore in 2000-2001, as per the economic
survey, 2001-2002.
The product group of gems and jewellery makes significant
contribution to India’s overall export earnings and remains in the
forefront of foreign exchange earners. Diamonds accounts for 80 to 93
percent share in the total exports of gems and jewellery. In fact cut and
polished diamonds remain the single largest item which has made
significant contribution to the export effort of this sector. The other two
main items, though distantly following diamonds, are gold jewellery and
coloured gemstones together accounting for 6 to 18 percent share of the
total exports of gems and jewellery. In term of directional pattern, while
Indian gems and jewellery are exported to a large number of world
markets, the USA, Hong Kong, Belgium and Japan are the major export
destinations. These four markets accounted for about 74 percent share in
India’s total exports of this thrust sector in 1997-98. All these markets
happen to be the thrust markets for export expansion of gems and
jewellery. Other important destinations for India’s gems and jewellery
exports are Israel, UAE, UK, Thailand, Singapore and Switzerland.
15 Pawan Kumar Garga, Export of Inda’s Major Products-Problems and Prospects, New Century Publications, Delhi, 2002, p. 94.
47
As per a report published in Research and Markets16 “Gems and
jewellery have been used by the Indian Civilization since ages for both
its aesthetic as well as investment purposes. Precious metal and stones
have been an integral part of the Indian civilization since its recorded
history. India has the distinction of being the first country to introduce
diamonds to the world. The country was also the first to mine, cut and
polish and trade in diamonds. The industry can be classified into various
sub segmented like diamonds, coloured stones, gold and silver jewellery,
pearls etc. However, the two major segments in Indian are gold and
diamonds. India dominates the diamonds processing trade with 11 out of
12 diamonds being cut and polished in India. The industry is
characterized by highly unorganized trade, labour intensive operation,
working capital and raw material intensiveness, price volatility of gold
specially and export orientation. Demand for gold and diamond
jewellery is driven by festivals and wedding, increasing affluent and
middle class population, increase in per capita spend on luxury items etc.
Though India plays a dominant role in the gems and jewellery
industry in terms of processing and consumption, mining of gold and
diamond is amongst the lowest in the world. India imports gold and
rough diamonds along with other precious metals. Gold is purchased
from countries Switzerland, South Africa, Australia, UAE etc. and rough
diamond are sourced from Belgium, UK, Israel, UAE etc. With political
pressure to increase local beneficiation to African mining nations, new
cutting and polishing centers like Botswana, Namibia, Angola will
emerge , reducing India’s dominance in Diamond processing.”
16 A report published in Research and Markets brochure-ww.researchandmarkets.com/reports/682397
48
According to Anjani Sinha17, “Retail investor can soon exchange
their e-gold units issued by Mumbai-based National Spot Exchange Ltd.
(NSEL) with jewelers across the country. The exchange plans to launch
the scheme from March and hopes to empanel around 10,000 jewelers in
the country for this. The exchange is an electronic spot market promoted
by Financial Technologies India Ltd and National Agricultural
Cooperative Marketing Federation of India Ltd. According to the
proposed scheme and investor can buy gold form the exchange’s
platform and take physical delivery of jewellery against the surrender of
demat units any time. There could be a savings of 10-15 percent for an
investor through this scheme against the normal buying of gold in the
form of a coin or exchange of old jewellery.”
In her research report Gunjan Bihani18 stated that “The appeal
for jewellery is the highest among younger consumer sections. China’s
young working age population is quite high. There is also a large
demand from the matrimonial market. Every year, about 18-22 million
people in China get married. Total annual wedding expenses in China
are estimated at 250 billion RMB (about US$ 30.5 billion). Even if one-
tenth of that is used for jewellery consumption, the figure is a high 25
billion RMB (about US$ 3.1 billion). The younger consumer section is
also fashion-conscious, and the rate of design obsolescence is fast,
thereby helping innovation and sales. The high growth of diamond and
platinum jewellery witnessed in the Chinese market after the initial rush
17 Sinha Anjani, Jewellery Bhavisheya, volume 7 No. 2, March 2011,Page no. 31 18 A Report on jewellery market in China and its development; Submitted by Gunjan Bihani on
March 2, 2011
49
for gold in the 1980s can be attributed to the desire for new and trendy
ornaments among the younger consumers.
According to Nusrat Ahmad19 “The Indian Gems and Jewellery
sector is going through rough patches since 2008 with more than 100000
skilled and unskilled labourers being laid-off due to poor demand from
the US market as it is reeling under the current global economic
downturn. Exports to the largest market- the US declined by over 25
percent in 2008 (January- December). Simultaneously, plunge in
domestic jewellery demand added to the sectors woos, as raw material
cost jumped, inflation stabilized, gold prices are touching high records
and people are left with low disposable income to purchases the luxury
goods.
Out of the total demand for Indian gems and jewellery in 2008
(January- December), 90.45 percent was export driven and remaining
9.55 percent came from domestic customers. However, as per
ASSOCHAM’s estimates, in the calendar year 2009, the share of
domestic demand will increase to 10.81 percent in total demand for
gems and jewellery and exports based demand have carve out a share of
89.19 percent.
The rupees value against the dollar determines the cost of raw
material imported for gems of jewellery as payments are made in the US
currency. During the calendar year 2007, the value of rupee against
dollar stood at Rs. 41.93 per dollar, with raw material payments by India
worth at USD 16,780.61 million. However, in 2008 rupee depreciated
against dollar and reached at Rs. 43.38 per dollar, with imports touching
19 Nusrat Ahmad, Outlook for Indian Gems and Jewellery Sector, ASSOCHEM ECO PULSE STUDY, 2009.
50
USD 20,143.35 million. In calendar year 2009, it has been observed that
on an average rupee further depreciated against dollar at Rs. 49.40 per
dollar that could aggravate the import cost of raw material. However, if
value of rupee against dollar is maintained at Rs. 49 per dollar in the
2009, without further depreciation, only then manufacturers would have
been able to carry on production and employment.
Gems and jewellery, diamonds and precious metals have been
given a special boost by the Ministry of Commerce and Industry, the
Export Promotion Council for Gems and Jewellery and Star Trading
houses (in the gems and jewellery sector), besides Diamond India
Limited, MSTC Limited and STCL Limited have now been added under
the list of nominated agencies for the purpose or import of precious
metals.”
Ashima Mahindra20 in her report stated that The gold market in
Meerut is a good example of what impact the global economic
slowdown is having on out local markets. Being one of Asia’s largest,
the gold market in the old quarters of the city employs over 25,000
skilled craftsmen and around 60 kilograms of the precious metal is
processed here every day. But constant fall and erratic fluctuation in
global gold index because of the stock markets is badly affecting the
gems and jewellery markets. The uncertainty in global prices has eaten
up lots of jobs and the workers have been sitting idle for days and weeks
now. And with most of the workers being migrants, they are bound to
take extreme steps to overcome their depression. Most of the traditional
traders are blaming the greed of speculators for the mess. Meerut’s
20 Ashima Mahindra, Shine’s off Meerut Gold Market, Meerut Plus, A Supplement of The Times of India, N. Delhi.
51
bullion market sources gold from all over the world and turns it into
exquisitely crafted ornaments. Apart from the global crisis, the
government decision to allow online trading in gold has disturbed the
price. The Indian rupee against the dollar has pushed Indian domestic
prices to record highs, causing buyers to tighten their spending with
sales in the country forecast to fall at least 15 percent on the year.
Buying gold ornaments, often to be presented as gifts, is considered
auspicious during the festival season and sales of gold usually surge
around this period. But India being a highly price- sensitive market,
demand has suffered as the rupee price has risen.
The Review of existing literature provided detailed
information regarding the history of jewellery industry, evolution
of branded jewellery, manufacturing process of jewellery,
changing scenario in jewellery industry in India. All these
information helped the researcher to a lot in completing her
research work.
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HYPOTHESES
The proposed research work is based on the following assumptions:
1. Production process of Jewellery is traditional.
2. Due to manual manufacturing system in Jewellery, generally the
cost of production works out very high.
3. Hallmark system is not in common practice among the jewellers
and buyers in India.
4. Marketing charges and margins are charged at very high rate from
the customers by the branded companies in Jewellery industry in
India.
5. A number of factors leave their direct or indirect influence on the
production cost and marketing of Jewellery.
6. There is a great scope of reducing production and marketing costs
in case of Jewellery manufacturing and its marketing.
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RESEARCH METHODOLOGY Following research methodology was adopted in the proposed
research study:
1. Selection of Area: District Meerut was taken for the purpose of
survey because this District has a prominent place in the field of
manufacturing and marketing of Gold and Diamond Jewellery.
2. Selection of Sample Units: For the purpose of survey 50 traditional
jewellers and the same number of goldsmiths manufacturing different
types of Jewellery was taken at random bases to study the marketing
process, marketing costs and margins.
3. Period of Study: Because this study has been conducted at micro
level and it is totally survey based, hence for the purpose to collect
the data regarding costing, marketing charges and margins, the year
2009-10 was taken for the study.
4. Collection of Data: Both the primary and secondary data was used in
this research study. Primary Data was collected through personal
interview from manufacturers and traders of traditional Jewellery
industry.
5. Tabulation, Analysis and Interpretation of Data and
Information: the collected data and information was tabulated in
such a manner so that these may be analyzed and be logically
interpreted.
6. Conclusion and Suggestions: In the end logical conclusions have
been drawn from the study and constructive suggestions have
proposed in the light of the findings.
* * *