There has been a decrease in demand of gold due to the rise in gold prices. Vinod Bamalwa, Director, Nemichand Bamalwa & Sons, spoke to BE’s Ankit Singh about the crisis in the gems and jewellery sector in the run up to the festive season.
Q. How has the jewellery market performed in the first two quarters of the current fiscal?
A. For the last three years, there has been a decline in the sale of diamond and gold jewelleries. With low GDP and stagnating incomes, there has been a decrease in footfall in almost all the jewellery showrooms this year. Also, the increase in the price of gold has added to the burden.
Q. What factors have contributed to the decrease in sale of jewellery products?
A. The rise in gold prices is largely due to global uncertainties. The economic instability in the global market due to various trade wars has also contributed to the hike in gold prices. The increase in import duty on gold to 12.5% and the rise of the global gold prices are the primary reasons for the sudden jump of gold prices in the country. With the introduction of GST, taxation rate has also increased. The government has been increasing the import
duty to generate more revenue from the gold market. But the increase in the affordability cost of the metal has led to an increase in its price and that is directly affecting the market. This slowdown in the jewellery sector will negatively impact
revenue generation for the government.
Q. Which products have greater demand in the jewellery market during Dhanteras?
A. In India, Dhanteras and Akshay Tritiya are two very important days for the jewellery industry. During these festivals apart from jewellery people also invest on items like gold coins and silver items.
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