New Delhi: As India increases its focus on developing manufacturing hubs, there is a significant opportunity for the US companies to bring in technological expertise in sectors like gems and jewellery, says a PwC report.
The report noted that the Indo-US tie-up in the gems and jewellery sector can be a win-win situation for both the countries, as on one hand the jewellery hubs can serve as captive production units for US retailers and on the other hand Indian manufacturers can benefit from the global expertise of their US counterparts.
“The Indo-US relationship can grow in the gems and jewellery segment wherein US retailers and Indian jewellery manufacturers participate to set up jewellery hubs within India,” as per a recent survey by PwC and Indo American Chamber of Commerce (IACC).
India is a large diamond manufacturing hub and is the largest importer and processor of rough diamonds in the world, while the US is one of the largest diamond exporters and exports roughly US $21 billion worth of diamonds worldwide.
Gold is an important export from the US and contributes 76% of the total precious stone export pie to India.
India is the largest exporter of gold jewellery owing to its large number of skilled goldsmiths and low cost labour in the country.
The report, however, noted the gems and jewellery industry faces several issues such as limited supply infrastructure, high import dependence and regulatory curbs. Moreover, there is no dedicated ministry to oversee this sector in India.
“This has led to various challenges for key players such as low technology adoption and limited research-led innovation,” the report added.
Indian companies use less technology compared to their global counterparts in diamond cutting and polishing works.
Opportunities exists for the US companies to collaborate with Indian jewellery value chain players to invest in the industry.
“The gems and jewellery sector is perfect for Indo-US trade to drive ‘brand India’ and will also benefit from the over USD 80 billion US jewellery retail sector. Joint ventures with US retailers and Indian manufacturers will ensure quality products at the most competitive prices,” Gitanjali Exports CEO Sanjeev Agarwal said in the report.
At the same, it will also strengthen manufacturing capabilities and create employment for traditional Indian artisans, he added.