The festival of lights is expected to bring back happiness for the jewellery industry in the country, as for the last 3 Years; sector has seen quite turmoil owing to various amendments in regulations.
Recently, Central Government has rolled back the previous notification that brought the gems and jewellery under the ambit of Prevention of Money Laundering Act (PMLA). According to the notification which has been rolled back, any dealer of precious metals, precious stones and other high-value goods with a turnover of Rs. 2 crore or more in a financial year was to be covered under the Act. The limit of Rs. 2 crore was to be calculated on the basis of the previous year’s turnover, according to the notification.
Talking about the latest policy revision, Saurabh Gadgil- Chairman & Managing Director, PNG Jewellers and Director, Indian Bullion Jewellers Association, said “We welcome the decision to extend the provisions of PMLA from the present limit of Rs. 50,000 to Rs. 2,00,000 in the case of jewellery purchases. The industry has been suffering since the industry came under the ambit of PMLA. KYC for Rs. 50,000 or over worth jewellery purchase was too low to attract PMLA. This is a positive step by the government and will be a big boost not only for the jewellers but also for the customers. Considering the current scenario, this year’s Diwali outlook seems bullish. Surge in gold pricing has come down and stabilized. Hence, we feel this year demand for gold and gold jewellery will be up by 10 to 15 per cent compared to last year.”
“At the beginning of the season due to PMLA there was a concern but the actual run up to Diwali has been very positive. From a consumer’s perspective there is no sense of gloom (at least with respect to the jewellery category) and we expect this year’s Dhanteras sales to be higher than last year. What is most interesting is that we believe that the growth will be volume led,” said Vijay Jain (CEO and Director – ORRA)
A lot of jewellers felt that right now market sentiment seems positive for both investors and buyers. With the advent of the wedding season post festivals, it seems like the perfect time to shop for bridal jewellery across all communities. Also, the market is currently flocking with great discounts and promotions on fine jewellery; it is indeed a great time to be a customer. All these factors are in favour of a wonderful Diwali, which the industry needs, considering the slowdown in the past quarter.
“We are expecting an increase in demand for both gold and diamond Jewellery this Dhanteras. It is also the onset of the wedding season, so there will be a good demand for small and big-ticket items. The announcement of PMLA act’s withdrawal is a big relief & the timing is right – just before Diwali. There are women/housewives who come to us to buy Jewellery with the money they save from kitties. Keeping favourable factors in mind, we are expecting at least 20-25 per cent increase in sales this Dhanteras,” said Ishu Datwani, Founder, ANMOL.
Though initially, there was a bit of resistance for GST in terms of compliances, the industry seems to be gradually adjusting to the GST regime. The industry feels that the GST will also have no impact on the festive sales. “This year, there will be a coveted demand for gold Jewellery in bridal and festive theme with the dominance of yellow metal. Overall, positive factors like lower gold prices and current walk-ins are indicators of a good festive season,” said Vaibhav Saraf, Director, Aisshpra Gems & Jewels.
Aditya Pethe, Director, WHP Jewellers said, “We are expecting a good demand this season. The market sentiment has improved since Akshay Tritiya and government’s decision of putting gems and jewellery industry in a 3 per cent slab has reinstated consumer’s faith in the industry. The timing of the PMLA roll back couldn’t have been better as Diwali is around the corner and this move will translate into a positive sentiment amongst buyers. With current the market scenario, we are expecting a 30-35 per cent increase in sales and have noticed that younger consumers prefer more of lightweight diamond Jewellery. Keeping this in mind, we are hosting a variety of offers on diamond Jewellery which includes promotions like a free gold coin with every diamond jewellery purchase”.
The industry is quite hopeful of good demand during Dhanteras and Diwali. Supporting the sentiment, Tanya Rastogi, Director, Lala Jugal Kishore Jewellers said, “This Dhanteras the mood is of watchful excitement. As per the statistics, the currency flow in our economy has reached back to the pre-demonetization levels. The undisputed annual demands have accrued for an extended period, and are expected to realize now. And frankly, the unwillingness to sit on currency in face of frequent unpredictable government policies and gold being the most popular mode of conversion nationally, all point towards a highly favorable oncoming Dhanteras”.
Sunay Gandhi – CEO, Pristine Fire and Partner, Vishal Diamonds said, “We expect good sales this season starting from Dhanteras. The fact that KYC requirement is no longer required for cash purchase of gold above 50,000 will boost sales tremendously. Younger people usually prefer light weight & affordable diamond jewellery which is fashionable and stylish at the same time. People are spending between 20,000 to 60,000 depending on how much they have saved. It is seen as a day to accumulate more wealth by Indian households. People are buying items such as Om or Swastik pendant or any form of jewellery to ensure that good luck enters their life on this day. The Indian customers have started purchasing gold and diamond jewellery right from early morning. Affordable light weighted jewellery is in high demand in the market. Customers from various cities and towns in India who had placed their orders last week we are ensuring that they will get deliveries today.”
With the government having notified the provisions of the Bureau of Indian Standards Act, 2016 from October 12, the industry is hoping that this move would make them more accountable and protect consumer interest. This will certainly draw more consumers to the jewellery sector.
Commenting on the importance of hallmarked jewellery, Vaibhav Saraf said, “People are becoming more and more aware of the benefits of hallmarked Jewellery in tier II and tier III cities as it increases transparency in dealings thus organised players like us are more preferred which too will improve our sales.”