Gems & Jewellery

Gujarat : An Enduring Strong Economy

►High industrial growth : Gujarat has demonstrated a

high industrial growth rate of 12.5% from 2002 -2007

► Industrialisation : Gujarat is home to over 800 large

industries and 3,20,000 micro, small and medium

enterprises

Composition of GSDP as per economic activity (2006-07)

18.2%

37.8%

44.0%

Source: Socio Economic Review 2007-08

►Population : Over 50 million (5.0% of India)

►Geographical area : 1,96,000 sq. km (6.2% of India)

►Gross State Domestic Product (GSDP) : US$45.3 billion

►Per Capita Income : US$915 at current prices

►Urbanisation : 37.4%

Primary sector

Secondary sector

Tertiary sector

Presence across industry sectors

Gujarat : A Thriving Industrial State

Contribution to India's economy

§ World’s largest producer of castor and cumin

§ World’s largest gas based single location sponge iron plant

§ World’s largest producer of processed diamonds

§ World’s 3rd largest producer of denim

§ Asia’s largest grass root petroleum refinery at Jamnagar

§ India’s largest producer of cotton

§ India’s first LNG chemical port terminal at Hazira

Significant share in key sectors & products

Source: Socio Economic Review 2007-08

30.0%

22.0%

19.2%

17.0%

15.6%

14.0%

10.0%

9.5%

Stock market capitalization

Coastline

Exports

Fixed capital investmentValue of output

Net value added by manufacture

No. of Factories

EmployeesPetroleum products

Chemical & Pharma

Engineering Industries

Food & Beverages

Textiles & Apparels

Mineral based industries

Metallurgical Industries

Others

31.2 %22.9 %12.6 %9.7 %6.5 %2.9 %7.5 %6.7 %

35.0%

42.3%

50.0%

58.0%

65.0%

80.0%

85.0%

98.0%

Pharmaceuticals

Cotton

Groundnut

Chemicals

Petrochemicals

Plastic industry

Diamond processing

Salt processing

Soda ash production

Fabrics 30.0%

42 %

Power

Gujarat: Robust Infrastructure

►Present power generation capacity is 9,628 MW; plans afoot to raise it to 25,000 MW by 2012►Per capita power consumption is 1,354 units against the national average of 665 units►Rich availability of natural gas (34 MMCD) and lignite (1,072 MMT)

► 24-hour 3-phase uninterrupted power supply

Gujarat is the only State to carry out interlinking of rivers

►An extensive water grid network of 75,000 km for irrigation and drinking► It will cover 75% population of the state by 2010

Transformation of economy through natural gasGas

►Gujarat State Petronet Limited (GSPL) supplies piped gas to 13 districts, 5 more districts will be

added

►Total length of Integrated Gas Grid will be 2,200 km, of which 1,453 km is complete and the rest

is under construction

Water

Dependable power supply – key to industrial development

Gujarat Ports opening the gateway to prosperity

► 42 ports along 1,600 km coastline, including 1 major port at Kandla and 41 minor ports

► Landmark projects such as LNG port terminal at Hazira developed by Shell India Limited,

green field port at Mundra developed by Gujarat Adani Port Limited, LNG terminal at Dahej

developed by Petronet LNG Ltd. and Pipapav port developed by Gujarat Pipapav Port Ltd

Ports

Airport connectivity – a cutting edge for business

► 13 airports - Vadodara, Surat, Jamnagar, Rajkot, Bhavnagar, Porbandar, Bhuj, Pipavav, Mandvi, Mundra, Kandla, Palanpur and Ahmedabad (International Airport)

Airports

Rail and Road Surfaced road length – one of the highest in India

►State-of-the-art road infrastructure: India’s first National Expressway from Ahmedabad to Baroda

►Total road length is 74, 018 km - 95% surfaced road

►Total rail length - 5188 km (8.25% of India)

Gujarat: Robust Infrastructure

The Indian Gems and Jewellery Industry

India’s position in the global market

► World’s largest hub for diamond processing

► Largest consumer of gold in the world

► Second largest producer of gold jewellery in the world

► World’s largest cutting and polishing industry

Source: India Brand Equity Foundation (IBEF) Report on Gems & Jewellery, Gems & Jewellery Export Promotion Council (GJEPC)

Table 1: Indian gems and jewellery industry snapshot

(2006-07)

27%Diamond jewellery market growth

15%Gold jewellery market growth

US$ 1.2 billionDiamond jewellery

US$ 13.5 billionJewellery market size

► The global market for gems and jewellery is estimated to be

worth US$ 85 billion with key markets such as South Africa,

USA, Italy, Belgium and Israel having registered an average of

compound annual growth rate (CAGR) of 5-10% in the last decade

► The global market for gold is estimated to be 3,300 tonnes

► India’s exports in gems and jewellery was US$ 20.89 billion in

2007-08

► The sector contributes 13.4% to India’s total exports

► 11 out of 12 stones set in jewellery are cut and polished in

India

► Diamonds processed in India account for 55% share in terms of

value, 80% in terms of cartage and 90% in volume, of the total

world market

► 94% of global workers involved in diamond industry are in India

► Total estimated jewellery sales in India is expected to reach US$

21 billion by 2010 and US$ 37 billion by 2015

Gujarat: The Gems and Jewellery Hub of India

Source: IBEF Report on Gems & Jewellery, 2006, Bureau of Indian Standards

AhmedabadShradha Assaying and Hallmarking Centre

AhmedabadParkar Gold

SuratNational Center for Hallmarking

AhmedabadMMTC Ltd.

RajkotVG Gold Assaying &and Hallmarking Centre

SuratIndian Diamond Institute

VadodaraGujarat Gold Centre

AhmedabadKesar Hallmarking Centre

AhmedabadGujarat Gold Centre

DistrictCenter Name

Table 2: Assaying and Hallmarking centres in Gujarat

Surat

Rajkot Vadodara

Ahmedabad

Map 1: Gems and jewellery clusters ► Gujarat accounts for 72% of the world’s share of processed

diamonds and 80% of total diamonds processed in India

► Almost 8 out of 10 diamonds in the world today are

processed in Gujarat

► Diamonds processed in Gujarat were estimated to be worth

USD 9000 million (2004-05), constituting 80% of India’s total

diamond exports

► 90% of total diamonds in Gujarat are processed by about

10,000 diamond units located in and around Surat

► Surat is referred to as the ‘Silky City Sparkling with

Diamonds’

► The State is home to several Centres of Excellence such as

the Indian Diamond Institute, which offer courses related to

the Gems and jewellery industry

► Surat, Ahmedabad and Rajkot are the major gems and

jewellery clusters

► Rajkot is internationally known for its unique hand made gold

and silver ornaments which constitute 85% of the total

jewellery production in India

Value Chain Analysis

Source: Report on “The Global Gems & Jewellery Industry, Vision 2015:Transforming for Growth”

Mining Gemstoneprocessing

Jewellery manufacturing

Jewellery retailing

Diamond, Gemstone, Gold

PlatinumCutting and

polishingDesign andfabrication

Studded jewellery

Expanded Diamond value chain

Sourcing Rough trade ProcessingMining

Silver and Others

Platinum

Gold

Diamond

ConsumptionFabricationProcessingMining

Established presence Emerging centre / market

Gujarat’s presence in the gems & jewellery value chain

Not applicable in Gujarat

Gujarat: Leading Industry Players

►The group’s core business is the export of polished diamonds and diamond studded jewellery and

manufacture of diamonds and jewellery

►The group has a large network of marketing offices spanning across USA, Hong Kong, Belgium, Japan,

Australia, Canada and Singapore

►Sanghavi Exports has a hi-tech diamond manufacturing factory, Sanghavi Diamond Manufacturing at

Surat, which is one of the largest units in Asia

►The group manufactures polished diamonds and diamond jewellery

►Karp’s diamond manufacturing facility is located at Surat

►Key manufacturer and exporter of diamond jewellery

►The Company’s products include diamond jewellery, gold jewellery and loose diamonds

►Founded in 1969, Venus Jewel is based in Surat, and its business includes diamond processing

►They manufacture a wide array of diamonds including round brilliants, emeralds, radiants, ovals, pears,

and marquises, ranging from 0.50 cents to 5 carats and above, D to K colours and IF to 13 purities

► In 1996, Venus Jewels developed a grading system – the Venus Grading System based on

standardisation in grading and rational price structure

►Pioneered the concept of online stock for increasing sales

Business descriptionCompany

Gujarat: Small Industry Clusters

JewelleryValsad

Gemstone (Agate)Khambhat

Gold and Silver JewelleryRajkot

Diamond processingNavsari

Diamond processingBhavnagar

Diamond processingPalanpur

Diamond processing, JewellerySurat

Diamond processing, Gold & Silver jewelleryAhmedabad

Gems & Jewellery ClustersRegion

Ahmedabad

SuratBhavnagar

Valsad

Palanpur

Navsari

RajkotKhambhat

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007, Indian Diamond Institute

Table 3: Gems and Jewellery clusters Map 2: Gems and jewellery clusters

Diamond and Gem Development CorporationSachin, Surat

Developer

Multi-productSector

FunctionalStatus

►Nearest NH/SH: National Highway 8 (13 km), Navsari-Surat State Highway (3 km)

►Nearest Rail Head – Sachin (1 km)►Surat Airport – 15 km►Nearest Port (JNPT) - 260 km

Connectivity

►Support infrastructure such as power, water, drainage, ►Common Effluent Treatment Plants (CETPs)►Jewellery Training Institute in the premises►140 residential dwelling units, schools, medical centres,

and recreational facilities

Availability of infrastructure

►Diamond cutting & polishing, jewellery making, textiles. home furnishing, healthcare & engineering

Major industries located in SEZ

Adani Exports, Zaveri Exports, KK Jewels, Gem Star Co. Pvt. Ltd., Himson International, Schurter Electronics, Ginza Industries and Royal Home Textiles etc.

Major clients

50Area(Hectares)

Surat

Special Economic Zone – SUR SEZ

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007

162 functional units31 new units planned

Special Economic Zone – Gems and Jewellery SEZ

Upcoming74Gems and Jewellery SEZ Gujarat Hira BourseIchhapore, Surat

StatusArea(Hectares)

Developer

Surat

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007

ConnectivityNearest NH/SH: NH No. 6 (Extension) , SH ONGC – MagdallaNearest Rail Head – Surat (18 km), 8 km from Surat Airport

Other provisions available

Training facilities for skilled manpower, Medical Facility, Recreational Facility, Health Club, Creche etc.

Educational Infrastructure

Ahmedabad

Surat

Gandhinagar

Source: Indian Diamond Institute

►Major institutions offering courses specific to Gems and jewellery

►Indian Diamond Institute (IDI), Surat

►National Institute of Fashion Technology (NIFT), Gandhinagar

►National Institute of Design (NID), Ahmedabad

►Graduate and diploma level programmes offered by

Indian Diamond Institute include

►Diamond sorting and grading

►Gemology

►Jewellery designing, manufacturing and appraising

►Jewellery business management

►Gem Diamond identification and grading

Considering Gujarat’s current position in Gems and Jewellery global value chain, the State focuses on training

and education with emphasis on design and diamonds.

Initiatives by the Government of India

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007

OtherOther provisionsprovisions►Nil custom duty to import rough and polished diamonds

►Import of precious metal scrap and used jewellery for

melting, refining and re-export of jewellery

►Indian government’s decision to allow 51% FDI in

single brand retail stores has led to a number of

international branded stores actively considering an

entry into the Indian jewellery retail market

Initiatives by the Government of IndiaInitiatives by the Government of India

Foreign trade policy (2004 Foreign trade policy (2004 –– 09)09)►Exemption of Service Tax on services (related

to exports) which are rendered abroad

►Introduction of re-import of diamonds and

jewellery exported on consignment basis

►Incorporation of the testing facility at International

Diamond Laboratory, Dubai, to reduce

transaction costs for the diamond sector

►Duty-free import entitlement of tools, machinery

and equipment

Initiatives by the Government of GujaratInitiatives by the Government of Gujarat

Cluster development scheme Cluster development scheme

► 25% contribution to the project proposal for

training programmes

► Contribution of 25–50% of the cost

component of the proposal in other matters

► 25% contribution to the project proposal for

training programmes

► Contribution of 25–50% of the cost

component of the proposal in other matters

Financial assistance to industrial parksFinancial assistance to industrial parks

Industrial park

► (Provision for the location of minimum 30

industrial/service units) – 20% of fixed

capital investment upto a maximum of

INR 10 million

Mini industrial park (minimum 11 units)

► 25% of fixed capital investment upto a

maximum of INR 5 million

Industrial park

► (Provision for the location of minimum 30

industrial/service units) – 20% of fixed

capital investment upto a maximum of

INR 10 million

Mini industrial park (minimum 11 units)

► 25% of fixed capital investment upto a

maximum of INR 5 million

Initiatives by the Government of Gujarat

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007

SEZ AdvantageFor SEZ Units

Income tax incentives►100% tax holiday for a period of any 10

consecutive years out of 15 years beginning from the year in which the SEZ is notified►Exemption from dividend distribution tax►Tax exemption on interest related to long-

term finance►Long-term capital gains arising on transfer

of shares in developer company tax exemption►No minimum alternate tax (MAT)

For developers of SEZs

Income tax incentives

►10 year corporate tax holiday on export profit – 100% for initial five years and 50% for the next five years

Common incentives

Indirect tax incentives

►Nil customs duty

►Nil excise duty

►Exemption from central sales tax

►Exemption from service tax

►Exemption from securities transaction tax

►Exemption from tax on sale of electricity for self-generated and purchased power

Other benefits

►Exemption of electricity duty

►Duty-free procurement of capital goods (including second hand capital goods), raw materials and consumable spares from domestic market

►Full freedom for sub-contracting

►Facility to realise and repatriate export proceeds within 12 months

►Facility to retain 100% foreign exchange receipts in the export earners foreign currency account

Other benefits►Full freedom in allocation of developed

plots to approved SEZ units on purely commercial basis

►Full authority to provide services like water, electricity, security, restaurants and recreation centres on commercial lines

►No net foreign exchange earning requirement imposed

SEZ scheme has been introduced to provide hassle free environment and state of the art infrastructure Gujarat has liberal labour policy providing complete flexibility in SEZs SEZ Development Committee monitors infrastructure development for each SEZ

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007

Current Investments

► Several innovative projects are proposed to be developed, as a result of the tremendous response from the industry

during Vibrant Gujarat Global Investors’ Summit 2009, amounting to a proposed investment of Rs. 9000 crores and

an estimated employment generation of 30000

► These innovative projects include:

Establishment of 3 SEZs at Surat, Ahmedabad and Vadodara

Establishment of a training centre for physically challenged people

Gems & Jewellery training institute

Jewellery fabrication► White gold► Platinum jewellery► Paved diamond jewellery► Studded jewellery► Mesh jewellery► Synthetic diamonds

Investment Opportunities

Infrastructure development► Jewellery manufacturing units► Assaying and hallmarking centres► Gold refinery► Diamond park► Technology upgradation

Jewellery retail► Luxury products such as watches, brooches, clocks

Logistics park

Kutch

Jamnagar

Porbandar

JunagadhAmreli

Bhavnagar

Rajkot

Surendranagar

Banaskantha

PatanMehsana

Himmatnagar

Kheda PanchmahalDahod

Vadodara

Bharuch Narmada

Surat

Navsari

Valsad

Anand

GandhinagarAhmedabad

Invest in Gujarat - A World- Class Business Destination

Knowledge corridor

Chemicals, petrochem. pharma, textiles and

engineering

Industrial corridor(DMIC)

55 special economic zones (SEZs) across

Gujarat

Gujarat International Finance-Tec City

Petroleum, Chemicals and Petrochemicals Investment Region

(PCPIR)

Bio-Tech cluster

Soda ash and salt-based industries, cement and steel

pipes

202 industrial estates across Gujarat

Soda ash and salt based

Engineering and ceramics

18 Captive Ports along 1600 km coastline

across Gujarat

Special Investment Region (SIR)

Petroleum and brass parts

To Delhi

To Bombay

Savli Biotech Park

202 industrial estates across Gujarat55 special economic zones (SEZs) across Gujarat

Agro Processing, Dairy & Engineering

Industries Department, Government of Gujarat

Industrial Extension Bureau (iNDEXTb)

Gujarat Industrial Development Corporation (GIDC)

Gujarat Infrastructure Development Board (GIDB)

http://www.gujaratindustry.gov.in

http://www.indextb.com

http://www.gidc.gov.in

http://www.gidb.org

Industries Commissionerate, Government of Gujarat http://www.icgujarat.gov.in

Key Contacts