The Indian government’s manifold gold curbs have started to take a toll. In July gold jewellery exports slid 70%, but exports of silver jewellery have more than doubled in the same month. Silver jewellery from India continues to be a major draw with consumers in Europe, Middle East and Hong Kong.
According to the Gems and Jewellery Export Promotion Council, silver jewellery exports surged 184% to $109.69 million in July. Interestingly, shipments of gold jewellery fell to $441.4 million in July from $1.5 billion in the year ago period, the Council said in a statement on Thursday.
“Silver jewellery from India has become a major hit in the CIS and eastern European nations. The same cannot be said of total gems and jewellery exports which fell 17% to $2.49 billion,” said council chairman Vipul Shah.
He added the major markets for India’s jewellery exports were the United States, Europe, Middle East, Hong Kong and Japan.
In June, India’s gems and jewellery exports fell about 41% year on year to $2.3 billion, due to shortage of gold and limited inventory in the domestic market. In June 2012, exports stood at $4 billion.
“The government’s steps to curb gold imports could immediately be seen in the exports fall,” said Shah.
He added that the rising price of gold (in India) coupled with the economic slowdown across the world brought about a change in the consumption patterns.
“Consumers tend to favour white metal jewellery over gold items. Whether in the US or in Europe, sterling silver jewellery has become extremely popular because consumers find them affordable. Consumers who earlier preferred white gold and platinum jewellery are now noticed switching over to silver,” said Sabyasachi Ray of the Gem and Jewellery Export Promotion Council.
Exports in the April to June 2013 period were also down 11.13%, as the Indian government increased the import duty on gold. This, retailers said, brought about a shortage of the precious metal in the domestic market.
During 2011-12 , silver jewellery exports grew to 44% compared with gold jewellery export growth of 30%. India jewellers said they had found a new class of buyers in the West who were keen to invest less than $100 in jewellery.
Jain added that exports of silver jewellery are expected to soar by 35% in FY 2013. That is, if the government does not decide to step in first!