A New Look at India's Jewelry

June 1998

Diamonds:News

A New Look at India's Jewelry

An opportunity for Indian jewelry manufacturers may be an opportunity for U.S. retailers

You may have Indian-made diamond jewelry in your store without knowing it, but it's there making money for you.

Jewelry from India once carried a reputation as low-end, low-quality reproductions. So the thought of carrying it in your store may make you squirm uncomfortably.

But after 10 years of market liberalization, technological advances in jewelry manufacturing and fine-tuning of labor skills to reflect global market demand, India is emerging as a leader in finely made jewelry.

Much of the Indian jewelry that reaches the U.S. today comes via jobbers or wholesalers who don't mention the source. But the Indo-Argyle Diamond Council aims to make a name for Indian diamond jewelry manufacturers through promotions and EVS (Exclusive Viewing Show) events held in New York City and Los Angeles. The shows give well-heeled jewelers a chance to schmooze with Indian jewelry manufacturers and buy their goods.

"It is a very pleasant experience," says Dale Perelman of Kings of Newcastle, a jewelry retailer based in New Castle, PA. "EVS is a good, quiet environment away from the office where it's easy to concentrate on doing business," he says. "The key thing for us, though, is that Indian-made jewelry has improved so much in quality and styling."

Scott Sedlacek, vice president and merchandise manager of Ben Bridge Jeweler, Seattle, WA, agrees. "In the past five years, Indian manufacturers have built up expertise and confidence levels, and the pieces we buy all conform to world standards," he says. "Without exception we are obtaining better margins from our Indian purchases, partly because the diamonds are priced so well."

Other major buyers at recent EVS events included Zale Corp., Irving, TX, and Carlyle & Co., Greensboro, NC. But buying isn't limited to major retailers, says Elizabeth Chatelaine, president of the Indo-Argyle Diamond Council. Independent jewelers also have discovered the advantage of diamond jewelry manufactured in India, she says.

Indian Powerhouse
Forecasters say India will be the next jewelry steamroller. It's already squashing much of its global competition, either by default (due to economic downturns elsewhere, giving India greater purchasing power for raw materials) or by sheer competitive power (it's hard to match India's low prices for quality diamond jewelry). In 1997, India's jewelry exports exceeded $770 million, up almost 16% from 1996 and almost 400% from 1990. Diamond jewelry accounts for most of the jewelry exported from India, and much of it is destined for the U.S.

India is at a crossroads. In the past 10 years, the country has focused on augmenting revenue derived from its cut diamond exports. The evolution from diamond cutting to jewelry manufacturing on a grand scale is partly financial. India handles approximately 70% of the world's cut diamonds, so the "raw material" is readily available at low cost to jewelry manufacturers. The evolution is part cultural also. Jewelry has long been a prized possession in India.

Future Growth
The future looks bright for several reasons. The interest in diamond jewelry, the availability of diamonds, technological advances and the desire to reap more from the country's diamond business have turned India into a magnet for diamonds cut elsewhere, says Dr. Surajit Mitra, joint secretary of India's Ministry of Commerce.

The country's diamond industry leaders are forming crucial partnerships to take advantage of this growth. Arrangements with independent producers of raw materials (such as the Argyle mine in Australia) help to ensure a steady supply of diamonds. And India is far too important a market for De Beers to snub.

But perhaps the most important partnership is with MVI Marketing Ltd., a California company that was instrumental in forming the IADC and has been crucial in brokering an introduction to the U.S. market for diamond jewelry manufacturers in India. (MVI also is credited with helping to develop a market for Argyle's diamonds.)

For his part, Mitra has helped to pass laws designed to cut out bureaucracy and increase the quality and quantity of jewelry exports. Now he's looking at the U.S. market. "The main goal," he says, "is to change the mindset of Americans about Indian jewelry and to increase exposure to Indian jewelry."

Mitra admits to obstacles, including a 6.8% duty on jewelry imported from India, and eliciting greater participation among India's manufacturers in creating top-notch brochures and developing ad campaigns.

As for complaints about returns or repairs involving India's jewelry, Mitra says they are easily resolved and that most IADC companies have U.S. branches to handle them.

"Indian manufacturers look at the United States as a market of great opportunity," says Mitra. "But it is not a one-way street. We want American buyers to take a look at the Indian market with an open mind. For them too, it will be an incredible opportunity to make money."

by Robert Weldon, G.G.

   Rings from Indian manufacturers: (from top) Simplex Diam, (800) 233-1155; Diamond & Jewelry Syndicate, (212) 302-8488; NOVA/MWI, (818) 989-2828; Adiam Corp., (888) 719-3576; Sanghavi Diamonds, New York, NY, (800) 234-1787; C. Mahendra Jewels, (800) 982-3562; Uni-Creation Inc., (212) 207-3805; Titan Jewelry, (888) 284-6065; Uni-Creation Inc.; and Su Raj, (800) 242-2220. Indo Argyle Diamond Council, (800) 797-IADC.




Copyright © 1998 by Bond Communications.


 

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