(L-R) Moderator: Vijay Jain, former CEO, Ritu Kumar, Colin Shah, Vice Chairman, GJEPC,Saurabh V Gadgil, CMD, PNG Jewellers, Manohar Gangwani, DGM, State Bank of India, Sabyasachi Ray ED, GJEPC, Nirakar Chand, CEO, Precious Metal Division, Diamond India Limited 


The eighth session of RJIF 2020 centered round the topic ‘Opportunities beyond the shores — How to become a retailer exporter to the large Indian diaspora living abroad’. The session was moderated by Vijay Jain, former CEO, Ritu Kumar. The panel comprised of Colin Shah, Vice Chairman, GJEPC, Sabyasachi Ray, ED, GJEPC, Nirakar Chand, CEO, Precious Metal Division, Diamond India Limited, Saurabh V Gadgil, CMD, PNG Jewellers and Manohar Gangwani, DGM, State Bank of India.

Starting the proceedings, Jain said, “It is a great time to be in the jewellery industry. We have seen a huge amount of change on the economic, social and political front, both within India and outside the country.”

Shah then took over, and went on to say that India is in the fifth position in the global gems and jewellery industry. We employ close to 5 million people, the country has more than one lakh retailers and 7000 manufacturers who are members of GJEPC. In spite of having such a huge ecosystem, we are still at number five. This is rather disappointing.

After the Chinese, India has the second-largest diaspora in the world. There are close to 25 million Indian expats living globally. So, the potential for exporting to Indian retailers based in international markets is huge, as Indians who have left the country are mostly prosperous, they love jewellery, and remain loyal to Indian retailers. “If you look at the value addition done by Italian, Thai and Chinese manufacturers, and compare it with the Indian manufacturers, we stand nowhere. Indian craftsmen are among the finest in the world, but they lack value addition skills, due to which we are unable to compete with foreign jewellery manufacturers,” said Shah.

Over the past 50 years, the Indian industry has been built on cheap labour and low-value addition. There is a huge scope for adding value to our jewellery, it’s just that we have not been doing it. It is not necessary that the entire growth will come from volume-based orders, it can also come from value addition by just marketing our design and craftsmanship capabilities globally, Shah added.

Sharing his personal experience, Gadgil said that in 2010, when PNG Jewellers surveyed the US market, it found out that the country only had Indian mom-and-pop stores. There was not even a single Indian brand present in the US at that time, and certainly, none catering to Maharashtrians, who live in large numbers in that country. “We have a number of NRI customers coming to India, and for them, the India trip is not about shopping. It is about spending time with relatives. So, we thought of looking at opportunities overseas. In 2008, PNG did some exhibitions in the US, targeting the Maharashtrian community, and that’s when we realized that people over there are willing to buy jewellery.

“The Indian community celebrates all the Indian festivals with a great deal of fervour, and also buys jewellery for these occasions. It expects structured service, with the same kind of warmth that it experiences in India. Keeping these factors in mind, PNG Jewellers improvised the designs and took a call on what kind of jewellery to keep or not. US business is more weekend-based, but a number of people buy jewellery during exhibitions. Competition is limited in America, and not intense, like in India, so the margins are much better with lower volumes,” Gadgil said.

Taking the discussion forward, Ray said the first thing which a retailer needs to identify is the consumer segment, and its tastes. “When you do decide to expand, it’s important not to homogenize the market. Retailers may not be able to sell the same product they sell in India, so the most important thing is to diversify the type of product you offer to suit the new market. That is the key to success,” he told the gathering.

He added that the second thing is the kind of opportunity you get. Nowadays, if you go to US or Dubai, setting up shop is not that difficult. But the important thing is to know the rules and the kind of facilities you can get from the government when you are starting out. After that, it is easier to operate in the overseas markets.

Gangwani, who was representing the banking sector, said that India has huge export potential, and in terms of banking finance, we are globally competitive. SBI readily provides credit to MSMEs for export business, and export credit is available at zero rate of interest. If you are availing export credit from the bank, you are actually gaining, he said.

October 2019 onwards, banks have been linking the rate of interest for MSMEs to external benchmark rates. So, the current margin of external benchmark rate is 7.8%, and the risk premium charged by the bank for export credit is Rs 0.55, so the effective rate for export credit is 8.35%, as on date. Under the interest equalization scheme, 5% subvention is available to MSMEs, so the effective rate on export credit comes to 3.35%. If you book forward, a premium of 4% is presently available. “You are actually earning 0.6% on bank credit if you are availing it in Indian currency. Moreover, SBI has reduced the export credit charges from 1% to 0.1% per annum,” Gangwani said.

Chand then stepped in to say that Diamond India Limited is a nominated agency, authorized by the Indian government to import and supply gold to jewellers. “We basically do two things for the jewellery exporters. We provide them gold, which is duty-free, and London Bullion Market Association (LBMA)-approved, and the second thing we do is we get them 12.5% duty exemption, which, today is almost Rs 6 lakh per kg. All that is required to be done by the exporter is to take the gold from us, make jewellery out of it, and export it. Once they submit the export documents, we process the duty refund,” he added.

He also said that presently, there are three different methods available to exporters to buy gold, adding that these schemes offer a lot of flexibility to exporters as they do not have to worry about factors such as when to procure the gold, at which rate, and so on.

The panelists concluded that the government is making the paperwork simple, and is giving financial incentives to jewellers for facilitating exports. And, it may be the most opportune time for retailers to explore exports as a route to expansion.