By slashing import duty on corals, finance minister P. Chidambaram may have rolled out the red carpet for Italian joint ventures (JV) in India’s jewellery making industry.
Italy, which has lost its sheen in the international arena when it comes to jewellery—its market share has shrunk to 14% from 32% in1998—is desperately looking for markets to penetrate.
As the world’s largest supplier of corals, Italian industry has been also eyeing the big market India presents. Indians too have also been looking at Italy for its technology and craftsmanship, as the gem and jewellery industry here strives to go upscale.
With Chidambaram cutting the import duty on corals from 30% to 10%, close on the heels of the Romano Prodi-led Italian trade delegation’s visit to India, the road may have opened up for the Italians to mark their presence here, says Pankaj Parekh, chairman (eastern region) for both The Gem and Jewellery Export Promotion Council and the Indo-Italian Chamber of Commerce and Industry.
“The Italians have been checking out possibilities in India and are more keen on setting up a base in the domestic tariff area rather than in any special economic zone (SEZ),” says Parekh, who led a delegation to Italy last November, with an objective of also exploring JV avenues.
Though Italy continues to be the largest player in world trade in the sector, its falling market share has hit its jewellery makers drastically, as most of their businesses are built around exports. While India is world’s largest jewellery maker, its exports are pretty insignificant. Its share in the global jewellery trade has inched up to 3.5% in 2000 from 0.5% in 1998.
Last year’s 26-year high in gold prices pushed the Indian jewellers to take a more serious look at the export market, playing on the production cost advantage they have. Between April 2006 and January 2007, India exported gold jewellery worth Rs19,717 crore, marking a growth of 42%, over the corresponding period in the previous year.