Akansha Kumari 4A

Kumar Gaurav 22A

Shainky Govil 44A

IMITATION JEWELRY

(7117) Industry Analysis

MBA 2013-15

Table of Contents

1. Objective..3

2. Research Methodology..3

a. Supply Side...3

b. Demand Side........3

3. Competitive Performance.....4

4. Why to buy imitation jewelry.......4

5. Indian Market Overview .....6

6. Raw Material.......7

7. Production Hubs In India.....8

8. Important manufacturing hubs........8

9. Suppliers Present In India.....9

10. Value Addition Chains....11

11. Process of production of imitation jewelry...12

12. Costing of imitation jewelry...13

13. Workforce......14

14. Imitation Jewelry Market14

15. SWOT Analysis.15

16. The Road Ahead...15

17. The Challenges..17

18. Export Destinations from India..19

19. Major Importers....20

20. Demand Fact Sheet...22

21. Initiatives Taken.......22

22. Strategies to boost Exports......25

23. Recommendations25

Objective

The objective of the project is to evaluate the export competitiveness of commodity

under chapter 61(HS code 7117) of Indian imitation jewelry sector. This study would look

at the entire value and its exports from India.

1. Research Methodology a. Supply Side

To assess the supply-side factors of export competitiveness, a secondary research was

conducted to find the supply-side bottlenecks that they are facing in India. The supply-

side framework is based more on opinions than on data/ numbers

b. Demand Side In order to evaluate the demand-side, the study has analyzed the competitive

performance of Indian exports of the commodity (HS code 7117) in the primary market

(US, UAE, Gemany, UAE, and France).

2. Competitive Performance A product is said to be export-competitive if:

1. The growth rate in unit value of the product imported from India exceeds average

growth rate in unit value of the product from all suppliers in a market, and

2. Its market share grows over the period 2008-2012.

3. To the extent market share is a function of quotas, market share of some county may

decline over time only because their exports are constrained by quotas.

Definition: Can also be known as cubic zirconia jewelry, faux jewelry or costume

jewelry. They are generally inexpensive versions of popular, more expensive brand name

jewelry.

Why buy imitation jewelry

Jewelry is every womans best friend and yet, whether you agree or not her worst enemy. Why enemy? The answer is simple; the price tag just makes her shun away the thought of owning jewelry. But then this is the case with expensive jewelry set in gold or platinum, embedded with precious stones. After all anything genuine does come with a price tag. While real jewelry may not be affordable, an absolutely wallet friendly option is imitation jewelry. This is available in a wide range from what we call junk jewelry to the gold- coated jewelry. It is far cheaper than anything genuine. In fact the gold coated or what we also called gold plated jewelry looks so real that anyone would think you have paid a packet for it. Not only gold, but also even diamonds are available in its cheaper option called American Diamonds. These are actually pieces of glass that are polished and cut in a way to give the sheen and look of a diamond. American diamond jewelry cost less than half of what actually diamonds cost. Genuine jewelry has its limited wearabilty, which means that what you pick up may not go with every outfit you own. And because of its cost it is not possible to own a piece of jewelry to match up to your wardrobe. But with the option of imitation jewelry, you could possibly afford to own a piece that could match with every dress you have. The range of colors and styles span over a wide variety. In fact there are designers who specialize in imitation jewelry. Right from feathered earrings to ivory pendants, from glass bangles to beaded anklets, it is probably available. In fact using your imagination and artistic and craft skills you could create your own range of imitation jewelry at home with beads and strings.

Indian Market Overview

Indian jewelry business has undergone a drastic transformation over the years. Original

diamond and gold jewelry has now made a way forward for artificial jewelry. The sky

rocketing prices of the traditional jewelry whether it is gold, diamond or silver, have

encouraged people to opt for affordable imitation jewelry.

Indian Imitation jewelry market has witnessed tremendous growth in the past few years.

In 2012, the market grew around 85% compared to the previous year. The imitation

jewelry market was estimated to reach INR 98.5 Billion by the end of 2013 due to rising

demand.

Imitation jewelry such as fashion jewelry is very much prevalent, especially amongst the

college going teenagers. Since the prices are cheap, they can get a wide variety and also

keep up with the changing fashion. Indian fashion jewelry industry is growing in

quantum, patronized mainly by the youngsters.

In future, the imitation jeweler market is expected to grow further with soaring gold and

silver prices, rising consumer preference, availability of more innovative designs and

variety etc. Considering these factors, the imitation jewelry market in India is anticipated

to grow at a CAGR of around 23.5% during 2013-2017.

Raw Materials

These are a few of the raw materials that are used as inputs for the Imitation Jewelleries:

1. ZIRCON: Is a mineral occurring as prismatic crystals, typically brown but

sometimes in translucent forms of gem quality. It consists of zirconium silicate

and is the chief ore of zirconium. Zircon occurs in many colors, including red,

pink, brown, yellow, hazel, or black. It can also be colorless. The color of zircons

can sometimes be changed by heat treatment. Depending on the amount of heat

applied, colorless, blue, or golden-yellow zircons can be made.

Major procurement centers:

Domestic: Tamilnadu , Kerela , Odisha

International :China , Indonesia , Malaysia , Ukraine , Brazil , Australia ,

South Africa

2. AMERICAN DIAMONDS: is the cubic crystalline form of zirconium dioxide (ZrO2). The synthesized material is hard, optically flawless and usually colorless, but may be made in a variety of different colors. It should not be confused with zircon, which is a zirconium silicate (ZrSiO4). It is sometimes erroneously called "cubic zirconium".

Because of its low cost, durability, and close visual likeness to diamond, synthetic cubic zirconia has remained the mostgemologically and economically important competitor for diamonds since commercial production began in 1976. Its main

2011 2012 2013 2014f 2015f 2016f

2017f

competitor as a synthetic gemstone is the more recently cultivated material, synthetic moissanite.

Major procurement centers:

Domestic: Panna mines , Rajasthan

International: China , Japan , USA , Germany

3. STAINLESS STEEL: In metallurgy, stainless steel, also known as inox

steel or inox from French "inoxydable", is a steel alloy with a minimum of

10.5%[1chromium content by mass.

Stainless steel does not readily corrode, rust or stain with water as ordinary steel

does, but despite the name it is not fully stain-proof, most notably under low-

oxygen, high-salinity, or poor-circulation environments. There are different

grades and surface finishes of stainless steel to suit the environment the alloy

must endure. Stainless steel is used where both the properties of steel and

resistance to corrosion are required

Domestic procurement : Rajkot, Jamashedpur, Hyderabad, Pune, New

Delhi, Chennai

International: India is self sufficient in the production of stainless steel.

4. Cup Chains

5. Rondels Procured mostly from SMEs located around

6. Metallic Balls production houses.

7. Stones in settings

Production Hubs in India

Imitation jewelry such as: Bangle, Bangles, Costume Jewelry (also called artificial jewelry,

replica jewelry, junk jewelry, fake jewelry, or fallalery), Bracelets, Kada, Chain, Mangal

Sutra, Mala, Necklace Set, Pendant Set, Anklet, Nose pin, Nose ring, Earring, Ring, hair

accessories

Manufacturer, Wholesaler, Supplier at: Rajkot, Gujarat, Mumbai, Maharashtra, Delhi,

Moradabad, Sambhal, Jaipur, Kohima

Important manufacturing Hubs

Here is a non-exhaustive list of major centers for manufacturing Imitation jewelry:

Mumbai

New Delhi

Rajkot

Jaipur

Noida

Kolkata

Ahmedabad

Chennai

Hyderabad

Coimbatore

Bengaluru

Moradabad

Pune Surat

The thing to be noted is that Imitation Jewelry market is flourishing in Tier 1

& Tier 2 cities but is yet to make its mark felt in lower wrung cities and towns.

Address 8, PLATINUM PLAZA, OPP. INDIAN OIL PETROL PUMP, NR. JUDGE BUNGLOW ROAD, BODAKDEV, Ahmedabad - 380015, Gujarat, India

ISABELLE EXPORTS Member duration 6 years

With an aim to stand tall on the expectations of patrons, we are engaged in providing them with attractive range of imitation jewelry. We are highly in demand for our quality assured products such as 3 Binder Case in Ring, 3 Ring Binder and 3 Ring Recipe Binder and more. Our Export Markets: Germany, Europe, China, Munich and Miami

Rhodolite Overseas Member duration 5 years Established in the year 2012, we are a trusted business entity in the domain of exquisite collection of cnc machine cutting imitation jewelry bangles. Our dedication towards work has gained us enviable reputation in the market. Our collection gives a very appealing look and is in accordance to the latest market trends. Our product range comprises imitation jewels gold plated, imitation bangles, imitation necklace sets and checker imitation jewelry Address: 'GANDHI SMRUTI' 3, PEDACK ROAD, Rajkot - 360003, Gujarat, India

Shree Parshavnath Creations (Fashion-Art) (Estb 1890) Member 9 years (Online Catalog)

Suppliers Present in India:

We are acknowledged as a top manufacturer, supplier and exporter of the competitive domain of imitation jewelry. All these products are exclusively designed, keeping in mind the latest trends & varied needs of the clients. At the same time, it is affordable and exquisitely designed. Our wide range of bridal bangles includes brass bangles, metal bangles, glass bangles aluminum bangles, metal bangles and stone bangles Address: 99, Swadeshi Market, Sadar Bazar, Delhi - 110006, India

Address 2994/2-A, STREET NO. 17, RANJIT NAGAR, New Delhi - 110008, India

TRANSWORLD TRADING INC. Member Duration 13 years

With a mission to establish ourselves as a leading organization, we started off 22 years ago, and soon our Imitation Jewelry collection started receiving great appreciations from the clients. We have maintained excellent track record in both the domestic and international market. The wide assortment we are dealing in comprises antique wooden boxes, decorative antique pet urn boxes, handicrafts, wooden handicrafts, equestrian products, saddles, fashion jewelry and even more

ArihantTouch Member 1 year Exporter, supplier, & trading com any offering wide range of american diamond nec lace set diamond nec lace set nec lace set american diamond c bangles stylish diamond c bangles designer bangles american diamond endant set diamond endant sets , stylish cz necklace sets , diamond pendants, designer pendant sets, bridal jewellery, diamond kundan necklace set, kundal bridal set, fashionable pendant set, diamond stylish pendant set, American diamond czkada, American diamond Address : 110, Kakakua Bldg., 3rd Bhoiwada, Shop No.-3, Bhuleshwar, Mumbai - 400002, Maharashtra, India

RoyalNx Member 2 years Based in Mumbai, India, they are a manufacturer and trader of a wide range of imitation jewelry and jewelry stones. Competitive Market Advantages:

Global export market Quality assured products Sophisticated infrastructure In house designing and quality checking team

Address : 61 - 63, SutarChawl, 1st Floor, Near Zaveri Bazar, Mumbai - 400002, Maharashtra, India FusionArts Member 3 years Manufacturer, Exporter, Distributor, Supplier and Trader of Imitation Jeweleries, Designer Pendant Jewelary Imitation Jeweleries, Designer Made Brown Gemstone Traditional Jhumka Earrings , Designer Mathaa Patti, Designer Necklace Jewelry, Designer Necklace Set, Designer Necklace Set For Women, Designer Necklace Set For Womens,

Designer Necklace Sets, Designer Necklaces Set., Designer Net Patern Earring, Designer Pearl Necklace Set, Designer Pearl Studded Hair Brooch , Designer Pearl Studded Kada, Designer Pendant Address : 312/314, Abdul Rehman street, Opp. Crawford Market, Mumbai - 400003, Maharashtra, India Zorba Logistics Pvt. Ltd. imitation jewelery...Trader and Exporter of Fashion garments, dust woolen coat, fashion accessories, handicrafts, jute bags, imitation jewelery, spices, eatables, logistics Service Provider of Freight forwarding, import, exports, custom house agent, transportations, air freight Address : I S-23, Sej Plaza, 2nd Floor, Off. S.V.Road, Malad (West), Mumbai - 400067,

Maharashtra, India

Shree Ambica Novelty Distributer and Supplier of Imitation jewelery-ring, bracelet Trader of Imitation jewelery-ring...Distributer and Supplier of Imitation jewelery-ring, pendent, bangles, set, necklaces, bracelet Trader of Imitation jewelery-ring, pendent, bangles, set, necklaces, bracelet Address: No 1112/16, Toy Market, Pankore Naka, Ahmedabad - 380001, Gujarat, India

Value Adding Chain in Imitation Jewelry (Handicraft Industry)

Identification of market opportunities

Prototype design and development / adaption and refinement

Test marketing

Upgrading equipping facilities

Securing inputs

Entrepreneurial hiring, training, managing

Production, quality control and packaging

Costing and pricing

Physical distribution

Export market development: Handicraft overview

In the changing world scenario, craft products exported to various countries form a part of lifestyle products in international market. The impact is due to the changing consumer taste and trends. In view of this it is high time that the Indian handicraft industry went into the details of changing designs, patterns, product development, and requisite change in production facilities for a variety of materials, production techniques, and related expertise to achieve a leadership position in the fast growing competitiveness with other countries. The 6 million craft persons who are the backbones of Indian Handicraft Industry as provided with inherent skill, technique, traditional craftsmanship but that is quite sufficient for primary platform. However, in changing world market these craft persons need an institutional support, at their places i.e. craft pockets for value addition and for the edge with other competitors like China, Korea, Thailand etc.

Imitation jewellery is largely made of brass, cast iron, nickel, plastic beads and stones,

instead of precious metals and gems. It does not have much resale value and prices

range between Rs 100 and Rs 30,000, the study said.

India is the second largest manufacturer of imitation jewellery after China. Indian

costume jewellery has a huge demand in the US, Europe, Canada, Australia and many

Asian countries.

Process of Production of Imitation Jewelry

The process is essentially ambiguous and depends on the type of jewelry to be made.

Some common steps for imitation jewelry are: Basic techniques for bending wire,

attaching clasps and closing crimps. And also usage of the different types of stringing

materials such as tiger tail and thread.

Basic tools required to make jewelry are round rose pliers, chain nose pliers, crimp pliers,

a wire cutter and bead board

Jewelry making supplies include stringing wire, clasps, crimps (used to hold the wire in

place) and ear wires for earrings

There are many different types of beads including glass, semi-precious stone, crystal,

silver, gold, metal and ceramic. Also use charms and various size chains to make jewelry.

It is a good idea to consider the use of jewelry presentation boxes and pouches for the

display and selling of your jewelry. Not only do they enhance the beauty of your jewelry

pieces but they also help increase your sales. Not only would the box protect the jewelry

piece, but it also allows your customer to present it as a gift.

Costing Of Imitation Jewelry

Again as per the ambiguity in the manufacturing and raw material supply even the

costing of this industry is very vague. Some of the common methods deployed for pricing

imitation jewelry are:

Simple jewellery pricing formula - Price = material costs x 3 + pro-rated hourly labour

rate. For example the necklace made cost Rs. 5 in jewellery supplies and took 30 minutes

to make. Using the formula Price = Rs. 5 material costs x 3 + Rs. 10 labour (30 minutes of

labour equals half an hour. So half of Rs. 20 hourly labour rate equals Rs. 10 of labour on

this necklace)

This gives you a selling price of Rs. 25.

An additional step in using the jewellery pricing formula above is to take into account the

following to adjust the resulting price:

(a) What will your target market be prepared to pay;

(b) How unique is the jewellery made;

(c) What do shops charge for similar pieces?

Indian Custom Duty of Products

HS-Code Item Description Basic Duty CVD SPL. CVD

71171100 Cuff-links and studs 10.00 % 6 % 0%

71171910 Bangles 10.00 % 6 % 0%

71171920 German Silver Jewellery 10.00 % 6 % 0%

71171990 Other 10.00 % 6 % 0%

71179010 Jewellery studded with imitation pearls or imitation or synthetic stones

10.00 % 6 % 0%

71179090 Other 10.00 % 6 % 0%

CVD Countervailing Duties

Generally, imitation jewellery comes in four different varieties Costume jewellery, Fashion jewellery, Rold gold and

Cubic Zirconia jewellery

Workforce

Though imitation jewellery industry is unorganized, it provides employment to many people, say merchants. About 70 per cent of employees working in the industry are illiterate women and they work from home. India may leverage its traditional craft-skills, low-cost labour, and fabrication techniques in some of the jewellery products (such as processing of small-sized diamonds), and replicate such advantages in the production of other products, and thereby become a global player across the gems and jewellery segments.

Imitation Jewellery Market Imitation jewellery (HS 7117): The Asian and European countries dominated the export of imitation jewellery Hong Kong, China, Austria and France. Major importers of artificial jewellery include USA, Germany, France, UK and Italy in 2007. Hong Kong was a major source country for all the major importers, followed by China and Austria. Indias ex orts under this roduct category amounted to US $ 117.46 million. Though India is also one of the major exporters of artificial jewellery, Indias roducts are mainly sourced by UK. Other major export destinations for India include: USA, UAE, Spain and Saudi Arabia; however, the volumes are insignificant as compared to the potential. India needs to target these markets through various strategies (Cuff links & studs of base metal w/n plated with precious metal (HS 711711): Major importers of products under this category include: USA, UK, Japan, France, and Hong Kong; major source countries for products under this category include: Thailand, UK, Hong Kong, China, and Germany in 2007. Thailand served as a source country for all major importers of the world (Table 37). Indias ex orts under this roduct grou amounted to US $ 2.58 million. Though India was not a major exporter under this category, India was a major source country for USA contributing 8.1% of the total im orts by the USA. In value terms Indias ex ort to USA was US $ 2.09 million a share of 81 % of Indias total ex orts under this roduct grou .

SWOT ANALYSIS

The Road Ahead

Strength Excellent Innovation styles

Cheap Labour

Changing consumer preferences

Value for money

Weakness Lack of skilled workers

Unorganised

Lack of high end technology

Low penetration

Oppurtunities

Product Diversification

Rising prices of Gold and Silver

Young untapped Indian population

Advent of online marketing

Threats Cheap imports from China

Entry of MNC Online portals

Lack of customer preference

Big penny marketing by traditional jewellers

These are some of the key concerns that this industry faces in the wake of

globalization and changing marketing landscape:

The jewelry industry in India adds a distinctive feature with high domestic and

international demand. With rising gold and silver prices, imitation jewelry market has

been witnessing significant growth over the past few years. Moreover, Indian imitation jewelry making is emerging as the next big market which has

been pre-dominantly driven by its indigenous designs and local demand. In addition, the

perspective of manufacturers, wholesalers, traders and retailers of the imitation jewelry

industry holds much more capability than the conventional offering. The industry dynamics and consumer behavior atterns have made India the worlds

second-largest manufacturer of imitation jewelry after China. Rajasthan, Uttar Pradesh,

West Bengal, Bihar and Madhya Pradesh are some of the important states known for

such products. Further, with the entry of large organized players, the market will become more

competitive and people have more choices among branded and quality products. Beside, Indian imitation jewelry has a huge potential for exports and enjoys huge

demand in the foreign markets. The demand is also rising in many Asian countries

which will help further the industry to accelerate in the near future. However, there are also certain challenges such as cheap imports from China, costly labor, etc. which needs to be addressed as these can affect the growth of the industry. Considering the above factors, the future of Indian imitation jewelry market seems quite bright

The Challenges Ahead

Market Driving Factors

Here we discuss in detail the propellants for the rising market of Imitation jewellery in

detail:

High Demand: The demand for imitation jewellery has surged by over 85% in the last one

year. People, especially women have adopted better standards of grooming after being

influenced by daily soaps. They ape the jewellery and the costumes which are worn by the

television stars. Moreover with the rise in standard of living and disposable income

customers undoubtedly prefer to go in for branded products.

Consumer preferences: The changing outlook of people regarding jewellery as a daily

wear commodity rather than an asset for life has made imitation jewellery more popular.

Variety and Affordability: Due to affordable range of the artificial jewellery, it is much

easier to make a collection for regular as well as formal occasions. Generally working

women prefer to change their jewllery (earrings, neck-pieces, rings etc) according to their

dresses.

Drastic hike in gold and silver price - With the prices of gold raising sharply, the

popularity of imitation jewellery has further increased.

Security purpose: Imitation jewellery is safer to wear as compared to the authentic

jewellery. In the pre-sent day when theft and crime is increasing in society, customers feel

more secure wearing fake jewellery.

Excellent innovative designs: Imitation jewellery comes with unlimited and exquisite

designs which can be easily purchased.

Value for money: Traditional jewellery cannot be changed according to latest fashion.

However imita-tion jewellery can be worn and discarded according to latest trends due to

their low cost benefit.

Lack of gender bias: In the past jewellery was exclusively for the fairer sex but in the

recent times men have also initiated an interest in adorning themselves with this. One can

easily come across specially de-signed fashion jewellery like bracelets, rings, chains,

pendants, earrings for the males also.

Cheap Imports from China: Imitation jewellery from China is flooding the Indian market and imports from China have already ca tured 30% of the countrys domestic mar et. It is also hurting imitation jewellery manufacturers, as Indian traders are now importing finished goods from China. According to data from the ministry of commerce, India imported Imitation jewellery

worth about INR 1.3 Billion in 2011-12. During the period April-September 2012, 0.6 bn worth of finished imitation jewellery was imported from China. However, this figure underestimates the actual level of imports, which are believed to be 10 times higher.

Accessibility

Besides metros and tier one cities, accessibility of standardized imitation jewellery is a big

issue, and therefore, a significant portion of the consumer segment is underserved.

Highly Unorganized

Indian Imitation jewellery market is highly unorganized with the organized market is nearly three-fourth of unorganized sector. In addition, the number of organized players is also less in the sector Indias gems and jewellery industry is highly unorgani ed and fragmented with more than 90% of the players having family owned businesses. According to a FICCI study, the gold processing industry has around 15,000 players, with only around 80 units having revenues of over US $ 5 million. India is also home to around 450,000 goldsmiths, over 100,000 gold jewellers, about 6,000 diamond-processing players, and 8,000 diamond jewellers. The unorganized and small-scale nature of the sector hampers the ability of Indian gems and jewellery industry to innovate, upgrade technologies, and emerge as a world-class supplier.

Lack of Customer Awareness

The customers need to be educated on the basic artificial jewellery care to maintain the quality or the olish of the roduct. Also Indian customers need to be informed that certain regions in India have humid weather which adversely affects the shine and the plating of the product.

Costly Labour

For the artificial jewellery industry labor is very expensive. In addition, there is a lot of attrition due to which the manufacturers have to continuously increase the wages of the labor, which adds to the overhead costs.

Low Quality Jewellery

In case of imitation jewellery, same designs are available in low quality material at low cost which is affecting the growth of the market.

Export Destinations from India

The following table represents the top ten major export destination of Imitation

jewelry from India: (all data in US$ thousands)

Importers 2008 2009 2010 2011 2012

World 157362 176373 162907 324817 348983

Afghanistan 623 2095 1494 41847 67213

United States of America

27777 27938 33221 44861 51448

United Arab Emirates

16027 30641 13582 88055 47557

United Kingdom

34601 35788 28171 34380 26721

Spain 8750 11046 11118 14469 16618

Saudi Arabia 6487 5113 7192 11819 12472

Thailand 270 108 28 68 11418

Malaysia 1256 1330 1854 2129 7865

Iran (Islamic Republic of)

623 494 778 3801 7476

Sri Lanka 357 289 467 1477 6207

We can analysis the change in exporting trend by observing the following graph:

A global map wise representation of Indian Imitation jewelry presence:

Major importers of India

Here is a list of major countries from which India imports Imitation jewelry:

E20 Imported value in 2007

Imported value in 2008

Imported value in 2009

Imported value in 2010

Imported value in 2011

World 9216 10833 12064 16373 24153

China 3751 4948 6981 11165 14991

Hong Kong, China

1055 1266 1270 719 1648

Austria 2356 928 467 1258 1515

Germany 616 732 355 380 904

United Kingdom

84 259 146 437 749

Philippines 0 3 3 65 632

Italy 107 156 164 175 512

France 146 528 344 305 496

Thailand 323 225 282 328 460

United States of America

108 124 405 306 451

The graph below shows the import footprint of India.

Demand Fact Sheet

Demand for imitation jewelry has suddenly gone up by over 85% due to drastic hike in

gold and silver price and increased interest in gems & stones during wedding and

current festive season as per the quick survey undertaken by ASSOCHAM-Social

Development Foundation (ASDF).

The exports have seen a rise of 35%, reveals the Associated Chamber of Commerce and

Industry of India (ASSOCHAM) survey.

The imitation jewelry market is about Rs 8,000 crore (growing at the CAGR of 20% y-o-y)

in India and expected to touch Rs 15,000 crore by 2015.

Consumers between the age group of 18 to 35 amount for about 78% of the total

demand.

Major demand centers in India are: Delhi, Mumbai, Kolkata, Gurgaon, Lucknow,

Bangalore.

Promotional Schemes to boost the sector

The government has launched various promotional schemes under its FTP to help the SMEs and SMSEs to incentivi e the im ort and ex ort of sunrise and hitherto.

Some of these schemes are :

1)Focus Market Scheme : Exporters of all products to notified countries shall be entitled

for Duty Credit scrip equivalent to 2.5% of FOB value of exports for each licensing year

commencing from 1st April, 2006.However New additional Markets notified in

Appendix 37C of HBP v1 shall be entitled for Duty Credit scrip on exports w.e.f

1.4.2008.Exports made by EOUs / EHTPs / BTPs who do not avail direct tax benefits /

exemption shall be eligible.

2) ASIDE : Jems and jewellery unites located in SEZ can now receive semi precious

metals prior to export or after export equivalent to the value of jewellery exported .

Wastage for subcontracting/exchange of gems and semi precious stones between SEZ

and DTA is allowed

3)Focus Product Scheme : Under this scheme the exemption re import duty for

imitation jewellery sent to USA for exhibition has been increased from 60 to 90 days .

Duty free export has been allowed for Canada .

4) Market access scheme : Financial assistance under the existing Scheme is provided to

ex ort or trade romotion organisations / ex orters etc. for enhancing Indias ex orts

through accessing new markets or through increasing the share in the existing markets.

Financial assistance is also provided under the scheme for various activities such as

participation in trade fairs abroad, opening of showrooms and warehouses etc.

Initiatives Taken

Government Initiatives:

The strategy to achieve the vision for imitation jewellery is as follows:

Product development and production: The product development strategy focuses on developing demand-driven products based on market requirements. The strategy builds upon already existing skills and cultural heritage, coupled with inputs from new designers, training in core business areas, horizontal and vertical linkages, ensuring access to raw materials and the fostering of entrepreneurship. The core of this strategy lies in the successful implementation of the design development, compliance, quality control and capacity building components that have been introduced in the schemes.

Marketing and compliance: The overall marketing strategy focuses on the steps needed to enhance the marketing efforts of the sector to capture a larger market share, and to seize the opportunities associated with the expanding tourism and corporate investments being made. One of the key areas entwined at each step in this strategy are addressing the compliance issues, so that the products are acceptable internationally. The marketing strategy focuses on identification of the most appropriate market niches, ensuring quality and standardization of products, ensuring proper market access, branding, and marketing of the products efficiently. Sales of imitation jewellery continue to be confronted by obstacles in meeting the quantity, quality, and cost demands of different segments of the market. For producers to be able to take advantage of new economic opportunities and capture new market segments they need assistance in

expanding their production capacity, in upgrading the quality of their products to the standards demanded by buyers, and in overcoming the many obstacles they face in meeting the requirements of the targeted markets.

Infrastructure Development: This strategy seeks to respond to the main challenge faced in the availability of infrastructure and latest technologies in the sector and suggests solutions to these challenges by ensured focused interventions. A new scheme of Infrastructure and Technology Develo ment will be critical in filling the institutional gaps in the sector.

Livelihood and working environment: The strategy for livelihood and working environment bases itself on providing social security to the artisans and their families. It also makes provisions for financial/ policy support and the necessary regulatory framework that fosters the development of viable entities which enable artisans micro enterprises (individually and collectively). Provisions have also been made for supply of tools and technologies, designs and marketing at the grass root level through the cluster approach.

Export Initiatives

A three-day fair, organised by the Export Promotion Council for Handicrafts (EPCH), would be inaugurated by Textiles Minister K Sambasiva Rao. The objective of the fair is to increase the country's share in the USD 16.3 billion global fashion jewellery market.

The council has been organising IFJAS on an annual basis and the export fortunes of this segment have got a significant boost. The year-on-year growth of fashion jewellery alone over the last three years has been a noticeable factor.

At Indian Fashion Jewellery and Accessories Fair, the buyers will have the opportunity to discover the finest in the Indian craftsmanship and artistic finish in perfect harmony with modern designs, contemporary colours and new product development under one roof, the release said.

The country's fashion jewellery and accessories exports increased to Rs 2,007 crore in 2012-13 from Rs 1,237 crore in th previous fiscal.

Other Steps Taken

The Gems and Jewelry Export Promotion Council (GJEPC) and the Indian Diamond

Institute (IDI) are to set up common facility centers in Surat and 12 other diamond-

producing places in the state.

No import duty on rough diamonds

Government has sanctioned 300 cr rupees to set up 12 Indian Diamond Institute

IDI will launch some of the key courses such as diamond grading, computerized diamond

planning, jewelry casting and manufacturing, jewelry model making, gold assaying and

refining, advanced jewelry designing, jewelry model making, jewelry business

management etc

Duty free import entitlement of commercial samples shall be Rs. 300,000

Duty free re-import entitlement for rejected jewelry shall be 2% of FOB value of exports

Imitation Jewelry Manufacturers Association (IJMA) and New Media Communication collaborates to host India's first ever interactive 'Fashion Jewelry and Accessories Show'

Private Initiatives:

Imitation Jewelry Association of India

Established in 1986, Imitation Jewelry Manufacturers Association (IJMA) is a non-profit organization dedicated to the growth and progress of the imitation jewelry industry of India. It's single, virtuous motives is to promote the Indian imitation jewelry market through events,

exhibition and making presentation to the government on the various issues faced by the

industry, and to promote trading. With a little over 1500 members under its wings, the role of IJMA involves highlighting the importance of global trading and encouraging manufacturers to compete with international markets through various initiatives - "Fashion Jewelry and Accessories Show" (FJAS).

The Gem & Jewelry Export Promotion Council

Established in 1966, the GJEPC has over the years effectively molded the scattered efforts of individual exporters to make the Gem and Jewelry sector a owerful engine driving Indias export-led growth. With more than 5,300 members spread all over the country, the Council is primarily involved in introducing the Indian Gem & Jewelry products to the international market and leverage their international relationships to promote exports. To achieve this, the Council provides market information to its members regarding foreign trade enquiries, trade and tariff regulations, rates of import duties, and information about jewelry fairs and exhibitions. This apex body of the Gem & Jewelry Industry is continuously working towards creating and retaining a pool of artisans, designers that are trained as per international standards so as to consolidate the Indian jewelry industry and establish it as a prominent global player in the jewelry segment.

Strategies to boost exports

Export to France (and other European countries):

Existing and potential trade between India and France in 2012

Product: 7117 Imitation jewellery

Sources: ITC calculations based on UN COMTRADE statistics

India's exports have been reported by India

France's imports have been reported by France

Produc

t Code

Product

Label

India's exports to France France's imports from world India's exports to world

Indicative

potential

trade, USD

thousand

Value

in

2012,

USD

thous

and

Annual

growth

in value

between

2008-

2012, %,

p.a.

Share

in

India's

exports

, %

Equivalen

t ad

valorem

tariff

applied

by France

to India

Value in

2012,

USD

thousand

Annual

growth

in value

between

2008-

2012, %,

p.a.

Share in

world

imports

, %

Value in

2012,

USD

thousand

Annual

growth

in value

between

2008-

2012, %,

p.a.

Share in

world

exports, %

711790 Imitation

jewellery nes 4,002 -1 1.7 10

131,213 6 4.9

232,048 23 13.2 127,211

711719

Imitation

jewellery nes

of base metal

whether o

not platd w

2,157 -4 1.9 10

465,457 6 8.3

116,457 28 2.9 114,300

prec metal

711711

Imitation

jewellery

cuff-

links&stud of

base metal

w/n platd w

prec met

24 18 5 10

7,413 9 4.2

477 -28 0.3 453

Frances total im orted value in 2012 for imitation jewellery is 604 083 USD thousand. India

contributed only 6183 thousand USD out of the total imports by France. From the above table,

Indias ex ort to France has witnessed a negative growth rate of -1 %, -4% and 18% in the

period 2008-12 in products 711790, 711719 and 711711 respectively. But the overall increase

in imports of France is 6%, 6% and 9% in these products. Hence, there is an opportunity to

increase trade with France and increase exports of imitation jewellery from India. European

region is the biggest trade market for India, therefore total ad valorem equivalent tariff in the

European region is very low as seen in the below table.

Importing country Year

No. of corresponding national tariff lines

India's export(USD Thousand)

Total ad valorem equivalent tariff

France 2013 4 8,851 10%

Belgium 2013 4 1,995 10%

Germany 2013 4 8,431 10%

Greece 2013 4 961 10%

Italy 2013 4 5,669 10%

There is a huge potential to increase trade with France and its neighboring countries.

Recommendations

The growing markets to be focused: The US is the largest importer, while the UK

continues to be the second largest buyer. EPCH Chairman Lekhraj Maheshwari says that

this sector has tremendous potential to expand further,

Anti-Dumping Intervention by Government: A growing concern voiced by the traders is

that illegal import of imitation jewellery has increased from China, thereby hurting not

only the industry. "Due to dumping from China, Indian manufacturers have lost almost

25-30 per cent business. We must stop it, otherwise it will inflict major damage to the

industry," said Nagendra Mehta, secretary of Imitation Jewellery Manufacturers

Association of India (IJMA).

The domestic market is not doing well due to higher cost of production and overall

inflation, which restricts the buying of imitation jewellery. Factor such as higher inflation

is hurting the industry and should be dealt with.

Better branding of the Indian Imitation Jewelry giving it better credibility and equity should

be done.

Training for increased efficiency and quality can be provided to the handicraft industry.

References:

http://www.trademap.org/

http://commerce.nic.in/

http://www.icrier.org/

http://www.aepcindia.com/

http://dgft.gov.in/

https://wits.worldbank.org/

http://data.gov.in/

http://www.unido.org/

http://www.cci.in/

http://www.unescap.org/