In an exclusive interview with SME Times, Rajiv Jain, Chairman, Gems and Jewelry Export Promotion Council (GJEPC) said that demand has increased in the export markets for the gems and jewelry products and the sector is likely to grow by 20-25 percent by the end of this fiscal as market is picking up.

How is export growth picking up in the gems and jewelry sector at present?
Rajiv Jain: The exports are picking up. There is a growth of 20 percent this year as compared to the previous financial year. Till now there has been a growth of more than 25 percent. But by the year-end the growth in the total gems and jewelry sector will be by 20-25 percent.

How much demand increase have you experienced after the global economic crisis?
Rajiv Jain: After the recession the US markets have picked up and we have started exporting to the US the way we had done earlier. In fact, the Gulf market is showing good performance and is picking up. The European market is bit slow, but it will definitely pick up soon.

Gold prices are increasing day by day. Is it affecting demand in the market?
Rajiv Jain: No, the demand is there in the potential market. The gold imports have picked up recently. I think the demand in the market is not affected. The diamond demand is there and the color stones' demand is also picking up. Over all the demand is positive now.

The demand in the domestic market has not gone down as drastically in the other markets. The demand has been slow in the domestic market in the last couple of months, but it is increasing currently. However, in the international front, the market has actually fallen in the past couple of months, but now it is improving as far as demand is concerned. In the domestic front the demand is as it was before. But in exports, things are different.

The US, Hong Kong and the United Arab Emirates accounted for a major parts of India's total jewelery exports. So, is there any scope for diversification into some new markets?
Rajiv Jain: Actually, we cannot shy away from America as it is one of the largest export markets for gems and jewelry products. But we are also looking towards alternative markets such as CIS countries, African countries, Latin America and the far-east.

We are exporting gold jewelry to the US, Europe and Gulf countries. We are trying to tap these markets now. The demand will come on slowly. These are new markets and it takes time to develop. It will take some years to get potential demand rise from this particular markets. But we are trying to focus on these markets.

What is your budget expectation for the fiscal 2011-12?
Rajiv Jain: We looking for the presumptive tax like the turnover tax. We are trying to get that from the government. All over the world, the garment market is getting that kind of benefits and India it is not provided by the government. In other parts of the world they get tax holiday.

Do you want the stimulus measures provided during the global crisis be retained during the budget 2011-12?
Rajiv Jain: The stimulus measures are gone. Yes, the government can extend continuation of all export promotion schemes. However, if the presumptive tax (turnover tax) comes, then India can become a gold hub in near future.

Indian jewelery manufacturers need to focus on innovation in design and use of advanced technology. What do you suggest?
Rajiv Jain: Yes, it is required. We need to upgrade all our institutes that we are running in the country. The R&D measures should be improved and upgraded. We keep on searching for the latest trend in designs and for that we hold seminars accordingly. We need to keep doing that in future to develop the gems and jewelry market. And, whenever we need any government support on that, we will ask them to support the industry to perform better.

There are many issues and challenges as far as the labour is concerned? How are you dealing with it?
Rajiv Jain: The labour laws should be simplified in India. When we are competing with China, we in India need to simplify our labour laws. We need to have some relaxed labour laws. As far as wages are concerned, we are ready to pay. But, we cannot hire a person who is not doing his/her work well. We need skilled people in the country. They must be trained to perform more. In fact, the NREGA scheme is also a problem because most of the workers who have gone back to their villages are not coming back, which has become a potential challenge for the industry. Either we have to do something or we have to pay better wages to them.

Is the gems and jewelry industry shifting market focus to China at present?
Rajiv Jain: Yes, at present we are concentrating in the Chinese market. We are selling diamonds there, but we have plan to sell jewelry eventually in China. We have already gone for a buyer-seller meet in China recently. We are displaying our products there. Like India, China is also a huge market and we need to concentrate in such markets. There is a good potential in the Chinese market. Moreover, the export growth in China will be in manifold.