Better GDP growth in America resulting in enhanced purchasing power of consumers
Better GDP growth, employment rate and consumption expenditure in the US is expected to support 10 to 15 per cent growth in gems and jewellery exports to the market this year against a flat growth last year. This might also help India’s overall gems and jewellery exports arrest the declining trend.
“We have seen growth in exports to the US since October and the shipments will continue till December 18 for the Christmas and New Year season. We expect the exports to the US to grow by 10 to 15 per cent this year against a flat growth last year. The US has been coming out with better economic indicators in the past few quarters and this has helped our exports also,” said Colin Shah, vice-chairman, Gems and Jewellery Export Promotion Council (GJEPC).
The GDP growth in the US recorded an average rise of 3 to 4 per cent during Q1-Q3 of 2018 as against 1-2 per cent during the same period last year, resulting in enhanced purchasing power of consumers for spending on various products, including gem and jewellery.
The retail jewellery demand too has rebounded in the US in the past three quarters. The total demand stood at 80.3 tonnes in these quarters against 76.7 tonnes in the corresponding period last year -– a growth of 5 per cent.
For the US, India is a major source for cut and polished diamonds. India’s exports of cut and polished diamonds grew by around 22.10 per cent from $4.45 billion recorded during April-October 2017 to $5.43 billion in April-October 2018.
In case of gold jewellery, though overall imports by the US fell by 5 per cent, Indian exports to the market witnessed an impressive growth of 13.13 per cent from $867.87 million registered during April-October 2017 to $981.85 million in April-October 2018.
However, the trade war between the US and China has not provided any additional benefit to India as gems and jewellery exports have not been affected by levying of additional tariffs.
According to Shah, India would arrest de-growth in overall gems and jewellery exports this year, mainly due to the growth in US exports. It would either see a flat or a marginal growth that can go up to 5 per cent. Hong Kong exports are not growing much due to the consumption concerns in the Chinese market. Gems and jewellery exports had declined 5 per cent in FY18.