Gems & Jewellery
Gujarat : An Enduring Strong Economy Population : Over 50 million (5.0% India) Geographical area : 1,96,000 sq. km (6.2% India) Gross State Domestic Product (GSDP) : US$45.3 billion Per Capita Income : US$915 at current prices Urbanisation : 37.4% High industrial growth : Gujarat has demonstrated a high industrial growth rate 12.5% from 2002-2007 Industrialisation : Gujarat is home to over 800 large Composition GSDP as per economic activity (2006-07) 18.2% industries and 3,20,000 micro, small and medium Primary sector 44.0% enterprises Secondary sector Tertiary sector 37.8% Source: Socio Economic Review 2007-08
Gujarat : A Thriving Industrial State Contribution to India's economy Presence across industry sectors Employees 9.5% No. Factories Net value added by manufacture Value output Fixed capital investment Exports Coastline Stock market capitalization 10.0% 14.0% 15.6% 17.0% 19.2% 22.0% 30.0% Petroleum products Chemical & Pharma Engineering Industries Food & Beverages Textiles & Apparels Mineral based industries Metallurgical Industries Others 31.2 % 22.9 % 12.6 % 9.7 % 6.5 % 2.9 % 7.5 % 6.7 % Significant share in key sectors & products Soda ash production Salt processing Diamond processing 85.0% 80.0% 98.0% World s largest producer castor and cumin World s largest gas based single location sponge iron plant Plastic industry Petrochemicals Chemicals 50.0% 58.0% 65.0% World s largest producer processed diamonds World s 3rd largest producer denim Groundnut 42.3% Pharmaceuticals 42 % Cotton 35.0% Fabrics 30.0% Asia s largest grass root petroleum refinery at Jamnagar India s largest producer cotton India s first LNG chemical port terminal at Hazira Source: Socio Economic Review 2007-08
Gujarat: Robust Infrastructure Power Dependable power supply key to industrial development Present power generation capacity is 9,628 MW; plans afoot to raise it to 25,000 MW by 2012 Per capita power consumption is 1,354 units against the national average 665 units Rich availability natural gas (34 MMCD) and lignite (1,072 MMT) 24-hour 3-phase uninterrupted power supply Gujarat is the only State to carry out interlinking rivers Water An extensive water grid network 75,000 km for irrigation and drinking It will cover 75% population the state by 2010 Gas Transformation economy through natural gas Gujarat State Petronet Limited (GSPL) supplies piped gas to 13 districts, 5 more districts will be added Total length Integrated Gas Grid will be 2,200 km, which 1,453 km is complete and the rest is under construction
Gujarat: Robust Infrastructure Rail and Road Surfaced road length one the highest in India State--the-art road infrastructure: India s first National Expressway from Ahmedabad to Baroda Total road length is 74, 018 km - 95% surfaced road Total rail length - 5188 km (8.25% India) Gujarat Ports opening the gateway to prosperity Ports 42 ports along 1,600 km coastline, including 1 major port at Kandla and 41 minor ports Landmark projects such as LNG port terminal at Hazira developed by Shell India Limited, green field port at Mundra developed by Gujarat Adani Port Limited, LNG terminal at Dahej developed by Petronet LNG Ltd. and Pipapav port developed by Gujarat Pipapav Port Ltd Airports Airport connectivity a cutting edge for business 13 airports - Vadodara, Surat, Jamnagar, Rajkot, Bhavnagar, Porbandar, Bhuj, Pipavav, Mandvi, Mundra, Kandla, Palanpur and Ahmedabad (International Airport)
The Indian Gems and Jewellery Industry The global market for gems and jewellery is estimated to be worth US$ 85 billion with key markets such as South Africa, USA, Italy, Belgium and Israel having registered an average compound annual growth rate (CAGR) 5-10% in the last decade The global market for gold is estimated to be 3,300 tonnes India s exports in gems and jewellery was US$ 20.89 billion in 2007-08 The sector contributes 13.4% to India s total exports 11 out 12 stones set in jewellery are cut and polished in India Diamonds processed in India account for 55% share in terms value, 80% in terms cartage and 90% in volume, the total India s position in the global market Table 1: Indian gems and jewellery industry snapshot (2006-07) Jewellery market size Diamond jewellery Gold jewellerymarket growth Diamond jewellerymarket growth World s largest hub for diamond processing Largest consumer gold in the world Second largest producer gold jewellery in the world US$ 13.5 billion US$ 1.2 billion 15% 27% world market World s largest cutting and polishing industry 94% global workers involved in diamond industry are in India Total estimated jewellery sales in India is expected to reach US$ 21 billion by 2010 and US$ 37 billion by 2015 Source: India Brand Equity Foundation (IBEF) Report on Gems & Jewellery, Gems & Jewellery Export Promotion Council (GJEPC)
Gujarat: The Gems and Jewellery Hub India Gujarat accounts for 72% the world s share processed diamonds and 80% total diamonds processed in India Almost 8 out 10 diamonds in the world today are processed in Gujarat Diamonds processed in Gujarat were estimated to be worth USD 9000 million (2004-05), constituting 80% India s total diamond exports 90% total diamonds in Gujarat are processed by about 10,000 diamond units located in and around Surat Surat is referred to as the Silky City Sparkling with Diamonds The State is home to several Centres Excellence such as the Indian Diamond Institute, which fer courses related to the Gems and jewellery industry Surat, Ahmedabad and Rajkot are the major gems and jewellery clusters Rajkot is internationally known for its unique hand made gold and silver ornaments which constitute 85% the total jewellery production in India Map 1: Gems and jewellery clusters Table 2: Assaying and Hallmarking centres in Gujarat Center Name Gujarat Gold Centre Kesar Hallmarking Centre MMTC Ltd. Parkar Gold Shradha Assaying and Hallmarking Centre Gujarat Gold Centre National Center for Hallmarking Indian Diamond Institute VG Gold Assaying &and Hallmarking Centre Rajkot Ahmedabad District Ahmedabad Ahmedabad Ahmedabad Ahmedabad Ahmedabad Vadodara Surat Surat Vadodara Rajkot Surat Source: IBEF Report on Gems & Jewellery, 2006, Bureau Indian Standards
Value Chain Analysis Mining Gemstone processing Jewellery manufacturing Jewellery retailing Diamond, Gemstone, Gold Platinum Cutting and polishing Design and fabrication Studded jewellery Expanded Diamond value chain Mining Sourcing Rough trade Processing Gujarat s presence in the gems & jewellery value chain Mining Processing Fabrication Consumption Diamond Gold Platinum Silver and Others Established presence Emerging centre / market Not applicable in Gujarat Source: Report on The Global Gems & Jewellery Industry, Vision 2015:Transforming for Growth
Gujarat: Leading Industry Players Company Business description Founded in 1969, Venus Jewel is based in Surat, and its business includes diamond processing They manufacture a wide array diamonds including round brilliants, emeralds, radiants, ovals, pears, and marquises, ranging from 0.50 cents to 5 carats and above, D to K colours and IF to 13 purities In 1996, Venus Jewels developed a grading system the Venus Grading System based on standardisation in grading and rational price structure Pioneered the concept online stock for increasing sales The group s core business is the export polished diamonds and diamond studded jewellery and manufacture diamonds and jewellery The group has a large network marketing fices spanning across USA, Hong Kong, Belgium, Japan, Australia, Canada and Singapore Sanghavi Exports has a hi-tech diamond manufacturing factory, Sanghavi Diamond Manufacturing at Surat, which is one the largest units in Asia Key manufacturer and exporter diamond jewellery The Company s products include diamond jewellery, gold jewellery and loose diamonds The group manufactures polished diamonds and diamond jewellery Karp s diamond manufacturing facility is located at Surat
Gujarat: Small Industry Clusters Table 3: Gems and Jewellery clusters Map 2: Gems and jewellery clusters Region Gems & Jewellery Clusters Ahmedabad Diamond processing, Gold & Silver jewellery Palanpur Surat Palanpur Bhavnagar Diamond processing, Jewellery Diamond processing Diamond processing Rajkot Ahmedabad Khambhat Navsari Diamond processing Bhavnagar Surat Rajkot Gold and Silver Jewellery Navsari Khambhat Gemstone (Agate) Valsad Valsad Jewellery Source: Industries Commissionerate / indextb, Government Gujarat, 2007, Indian Diamond Institute
Special Economic Zone SUR SEZ Developer Area (Hectares) Sector Status Connectivity Availability infrastructure Major industries located in SEZ Major clients Diamond and Gem Development Corporation Sachin, Surat 50 Multi-product Functional Nearest NH/SH: National Highway 8 (13 km), Navsari- Surat State Highway (3 km) Nearest Rail Head Sachin (1 km) Surat Airport 15 km Nearest Port (JNPT) - 260 km Support infrastructure such as power, water, drainage, Common Effluent Treatment Plants (CETPs) Jewellery Training Institute in the premises 140 residential dwelling units, schools, medical centres, and recreational facilities Diamond cutting & polishing, jewellery making, textiles. home furnishing, healthcare & engineering Adani Exports, Zaveri Exports, KK Jewels, Gem Star Co. Pvt. Ltd., Himson International, Schurter Electronics, Ginza Industries and Royal Home Textiles etc. Surat 162 functional units 31 new units planned Source: Industries Commissionerate / indextb, Government Gujarat, 2007
Special Economic Zone Gems and Jewellery SEZ Developer Area (Hectares) Status Connectivity Nearest NH/SH: NH No. 6 (Extension), SH ONGC Magdalla Nearest Rail Head Surat (18 km), 8 km from Surat Airport Gems and Jewellery SEZ Gujarat Hira Bourse Ichhapore, Surat 74 Upcoming Other provisions available Training facilities for skilled manpower, Medical Facility, Recreational Facility, Health Club, Creche etc. Surat Source: Industries Commissionerate / indextb, Government Gujarat, 2007
Educational Infrastructure Considering Gujarat s current position in Gems and Jewellery global value chain, the State focuses on training and education with emphasis on design and diamonds. Major institutions fering courses specific to Gems and jewellery Indian Diamond Institute (IDI), Surat Gandhinagar Ahmedabad National Institute Fashion Technology (NIFT), Gandhinagar National Institute Design (NID), Ahmedabad Graduate and diploma level programmes fered by Indian Diamond Institute include Surat Diamond sorting and grading Gemology Jewellery designing, manufacturing and appraising Jewellery business management Gem Diamond identification and grading Source: Indian Diamond Institute
Initiatives by the Government India Initiatives by the Government India Foreign trade policy (2004 09) Exemption Service Tax on services (related to exports) which are rendered abroad Introduction re-import diamonds and jewellery exported on consignment basis Incorporation the testing facility at International Diamond Laboratory, Dubai, to reduce transaction costs for the diamond sector Other provisions Nil custom duty to import rough and polished diamonds Import precious metal scrap and used jewellery for melting, refining and re-export jewellery Indian government s decision to allow 51% FDI in single brand retail stores has led to a number international branded stores actively considering an entry into the Indian jewellery retail market Duty-free import entitlement tools, machinery and equipment Source: Industries Commissionerate / indextb, Government Gujarat, 2007
Initiatives by the Government Gujarat Initiatives Initiatives by by the the Government Government Gujarat Gujarat Cluster Cluster development development scheme scheme Financial Financial assistance assistance to to industrial industrial parks parks 25% contribution to the project proposal for 25% contribution to the project proposal for training programmes training programmes Contribution 25 50% the cost Contribution 25 50% the cost component the proposal in other matters component the proposal in other matters Industrial Industrial park park (Provision (Provision for for the the location location minimum minimum 30 30 industrial/service industrial/service units) units) 20% 20% fixed fixed capital capital investment investment upto upto a a maximum maximum INR INR 10 10 million million Mini Mini industrial industrial park park (minimum (minimum 11 11 units) units) 25% 25% fixed fixed capital capital investment investment upto upto a a maximum maximum INR INR 5 5 million million Source: Industries Commissionerate / indextb, Government Gujarat, 2007
SEZ Advantage For SEZ Units Income tax incentives 10 year corporate tax holiday on export prit 100% for initial five years and 50% for the next five years Other benefits Exemption electricity duty Duty-free procurement capital goods (including second hand capital goods), raw materials and consumable spares from domestic market Full freedom for sub-contracting Facility to realise and repatriate export proceeds within 12 months Facility to retain 100% foreign exchange receipts in the export earners foreign currency account For developers SEZs Income tax incentives 100% tax holiday for a period any 10 consecutive years out 15 years beginning from the year in which the SEZ is notified Exemption from dividend distribution tax Tax exemption on interest related to longterm finance Long-term capital gains arising on transfer shares in developer company tax exemption No minimum alternate tax (MAT) Other benefits Full freedom in allocation developed plots to approved SEZ units on purely commercial basis Full authority to provide services like water, electricity, security, restaurants and recreation centres on commercial lines No net foreign exchange earning requirement imposed Common incentives Indirect tax incentives Nil customs duty Nil excise duty Exemption from central sales tax Exemption from service tax Exemption from securities transaction tax Exemption from tax on sale electricity for self-generated and purchased power SEZ scheme has been introduced to provide hassle free environment and state the art infrastructure Gujarat has liberal labour policy providing complete flexibility in SEZs SEZ Development Committee monitors infrastructure development for each SEZ Source: Industries Commissionerate / indextb, Government Gujarat, 2007
Current Investments Several innovative projects are proposed to be developed, as a result the tremendous response from the industry during Vibrant Gujarat Global Investors Summit 2009, amounting to a proposed investment Rs. 9000 crores and an estimated employment generation 30000 These innovative projects include: Establishment 3 SEZs at Surat, Ahmedabad and Vadodara Establishment a training centre for physically challenged people Gems & Jewellery training institute
Investment Opportunities Jewellery fabrication White gold Platinum jewellery Paved diamond jewellery Studded jewellery Mesh jewellery Synthetic diamonds Infrastructure development Jewellery manufacturing units Assaying and hallmarking centres Gold refinery Diamond park Technology upgradation Jewellery retail Luxury products such as watches, brooches, clocks
Invest in Gujarat - A World- Class Business Destination Banaskantha To Delhi Agro Processing, Dairy & Engineering Soda ash and saltbased industries, cement and steel pipes 202 industrial estates across Gujarat Petroleum and brass parts Engineering and ceramics Kutch Jamnagar Porbandar Junagadh Rajkot Amreli Patan Surendranagar Bhavnagar Ahmedabad Mehsana Himmatnagar Gandhinagar Anand Bharuch Kheda Vadodara Surat Panchmahal Narmada Dahod Bio-Tech cluster Gujarat International Finance-Tec City Knowledge corridor Industrial corridor (DMIC) Savli Biotech Park Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) Soda ash and salt based 18 Captive Ports along 1600 km coastline across Gujarat Logistics park 55 special economic zones (SEZs) across Gujarat 202 industrial estates across Gujarat Special Investment Region (SIR) Navsari Valsad To Bombay Chemicals, petrochem. pharma, textiles and engineering 55 special economic zones (SEZs) across Gujarat
Key Contacts Industries Commissionerate, Government Gujarat http://www.icgujarat.gov.in Industries Department, Government Gujarat http://www.gujaratindustry.gov.in Industrial Extension Bureau (indextb) http://www.indextb.com Gujarat Industrial Development Corporation (GIDC) http://www.gidc.gov.in Gujarat Infrastructure Development Board (GIDB) http://www.gidb.org