Diamond, Gems and Jewellery Stocks

As of February 2021, India’s gold and diamond trade contributed around 7.5% to the Gross Domestic Product (GDP) and 14% to total merchandise exports. The gems and jewellery sector aimed to employ approximately 8.23 million people by 2022, up from 5 million in 2020. Recognising its growth potential, the Government prioritised the gems and jewellery sector for export promotion.

In FY21, India’s gems and jewellery market was $78.50 billion. The export growth was driven by increased demand in the US and orders fulfilled during Virtual Buyer-Seller Meets (VBSMs) organised by GJEPC.

By 2022-23, India’s total gems and jewellery exports reached $37.73 billion. From April to December 2022, exports were $28.6 billion, marking a 6.28% increase compared to the previous year’s period.

The gems and jewellery sector is poised for growth in the upcoming years, mainly driven by the expansion of large retailers and brands. Established names are leading the organised market, creating new opportunities. The rise of organised players brings diversity in products and designs. Online sales are projected to make up 1–2% of the fine jewellery segment by 2021–22. The relaxation of gold import restrictions is expected to boost the industry.

Increased availability, reintroduction of low-cost gold metal loans, and potential stabilisation of gold prices at lower levels will likely spur volume growth for jewellers in the short to medium term. India, with 450 organised jewellery manufacturers, importers & exporters, is a key hub for jewellery manufacturing. Liberal government policies have greatly benefited these players. Recent positive developments in the industry are anticipated to support the demand for jewellery significantly. India’s gems and jewellery industry is set to reach $100 billion by 2027.

Before investing in the jewellery sector, several important factors should be considered:

• Market Trends and Demand: Understand current market trends and assess the demand for jewellery. Analyse consumer preferences, including styles, materials, and designs.

• Economic Conditions: The economic climate directly impacts consumer spending on non-essential items like jewellery. Economic stability or instability can influence purchasing power.

• Regulatory Environment: Stay informed about regulations related to the jewellery sector, including import/export restrictions, quality standards, and tax implications. Changes in regulations can significantly affect the industry.

• Technology Impact: Explore how technology is influencing the jewellery sector, especially with the rise of online sales and digital marketing. Embracing technology can be crucial for sustained growth.

• Supply Chain Management: Assess the efficiency of the supply chain, from raw materials to finished products. A well-managed and transparent supply chain is vital for the success of jewellery businesses.

• Consumer Behavior: Study consumer behavior and preferences. Awareness of changing tastes and preferences can guide investment decisions in product development and marketing strategies.

• Quality Standards: Ensure that the jewellery adheres to quality standards and certifications. Reputation is critical in jewellery, and maintaining high-quality products builds customer trust.

• Global Economic Factors: Consider global economic conditions as they can impact the prices of precious metals like gold and silver, which are fundamental to the jewellery industry.

• Sustainability Practices: Increasingly, consumers are conscious of ethical and environmental considerations. Investing in jewellery businesses prioritising sustainability and ethical practices can enhance long-term viability.

To invest in sector stocks via Angel One, follow these steps:

• Log in to your Angel One account.
• Click on the search icon and look for your desired Jewellery sector stock.
• Now, place your buy order. Simply click on the ‘Buy’ button, enter your desired quantity, and select the order type.
• To complete your transaction, click on the ‘Buy’ button.

You can track the status of the purchase from the ‘Positions’ section in the ‘Orders’ module. Once the stock is delivered, you can track its gains and losses from your ‘Portfolio.’