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India is poised to become a major fine jewellery market in the near future - Pramod Agrawal, Chairman GJEPC

24 september 2018

pramod_kumar_agrawal_xx.pngPramod Kumar Agrawal, the current Chairman of the Gem & Jewellery Export Promotion Council (GJEPC) of India is a successful entrepreneur in his own right. Despite belonging to a jewellery business family, with his father dealing in gemstones and gold jewellery, Pramod Agrawal’s aspirations were to go solo and start his own business venture.

The year 1986 saw Agrawal begin a small silver jewellery business with one artisan… with a single customer to cater to. But, that was just the beginning and there was no looking back. Over the years, under Agrawal’s leadership and guidance, the small firm grew by leaps and bounds and has now evolved into a multi-vertical company.

Today, Pramod Agrawal is the Chairman of Derewala Industries Limited, a Jaipur based conglomerate employing 1500 people across 4 unit, producing and supplying gold jewellery, silver jewellery, and imitation fashion jewellery in India and abroad.

Agrawal has been a Member of Committee of Administration in GJEPC for many years and was the Regional Chairman of GJEPC – Rajasthan Region before getting elected as Chairman at the National level. He has also managed the GJEPC’s institute ---Indian Institute of Gem and Jewellery (IIGJ), Jaipur--- for almost 5 years as its Chairman. During his tenure as Chairman IIGJ, he successfully garnered the support of the Government in getting the hostel building constructed. Today, the campus of the IIGJ, Jaipur is the largest campus among all IIGJ’s in the country.

Apart from this, he was associated with other trade bodies like GJC and Jewellers Association, Jaipur. During his term as convener of the Jewellers Association Show – JAS, the show achieved many landmarks.

A staunch believer in the advantage of a cordial and healthy relationship between the industry and the government, Agrawal expresses his faith in the Indian government to work out an industry-friendly policy for the country’s G&J industry.

Here, in an interview with Rough & Polished, Pramod Agrawal speaks about the Indian G&J industry’s challenges and issues but not before taking pride on its growth and inherent resilience.

Some excerpts:

The IIJS 2018 turned out to be a bigger success than expected. Exhibitors, as well as visitors, unanimously expressed satisfaction on the world-class ambience as well as the outcome in terms of volume of business. Any new ideas/changes that we can anticipate going forward?

This year, the introduction of Hall 7A was in itself a great achievement as we could accommodate an additional 200 exhibitors who were part of the waiting list of exhibitors. Every year with new features and world-class facility, our efforts have been to give our exhibitors and visitors the maximum opportunity to network and talk business in a convenient and relaxed manner. Going forward our efforts would be to accommodate more exhibitors and give our visitors a better experience every time without disturbing the convenience and comfort that the IIJS offers. We are happy that over the years, IIJS has given equal opportunity for small and big players to take their business to a new level.

The Indian G&J industry’s export performance, (polished diamond exports as well as gold jewellery including diamond studded jewellery) has registered ups and downs of late. Do you foresee good days again for the Indian industry due to the good response during IIJS 2018?

Definitely… at IIJS 2018 with more than 41 thousand footfalls and an estimated business of 8k crores of the order book, 20% increase compared to last year, we can see the positivity of the retailers before the upcoming marriage and festive season. IIJS has always played a crucial role in the development of the Indian gem & jewellery industry over the years. And this year too, I believe that IIJS has helped to reinvigorate the industry through its new and innovative offering from our exhibitors.

Due to synthetic ‘mixing’ episodes the industry has witnessed, consumer confidence is shaken and demand for diamonds has taken a hit. Do you feel it’s a cause for concern, especially in smalls/melees where detection is difficult? End consumers’ are wary of purchasing diamonds. Your thoughts?

Undisclosed mixing of man-made diamonds with natural diamonds has always been a concern to the industry. However, Natural Diamond Monitoring Committee has been taking initiatives to tackle the issue of undisclosed mixing of man-made diamonds along with creating industry awareness.

NDMC has been organizing Diamond Detection Expo and Symposium (DDES) with an objective to impart knowledge on man-made diamonds, its detection using various technologies available.

Moreover, with NDMC’s support, Gemmological Institute of India (GII) has developed an advanced detection instrument called Quick-Check. This instrument takes only a few seconds to scan diamonds and also detects loose as well as synthetics in Jewellery. Quick-Check also helps in segregation of synthetics from the rest in star Melee clusters of sizes down to 0.5 cent (-2 size). It is simple to use and does not need a highly qualified professional to operate. GJEPC has placed this machine at all of its affiliated labs across India and is available to any association at highly subsidised costs.

With consumer confidence at stake, on whom does the ‘onus’ fall to maintain accurate natural diamonds in the pipeline? Polished traders; jewellery manufacturers; wholesalers or retailers? Will a third-party certification hold well? How do you think this can be made foolproof?

The onus is on all the stakeholders, whether it is the traders, manufacturers, wholesalers or retailers. It’s not just about one product where the consumers lose the confidence but on the entire industry as we are selling a product of trust. We should be doing everything to make this natural diamond pipeline foolproof. In any case, whether it’s using a third-party certification or using the blockchain technology, we will be tapping all possible measures to safeguard consumer confidence.

It is widely known that the Indian diamond industry is not against synthetics or lab-grown diamonds per se, but suggests ‘disclosure’ by synthetics for smooth running of the two businesses separately. Looks like lab-grown diamonds are here to stay. Your comments, please.

Lab-grown diamonds are here to stay. As we have always told that both products will have their own market and clients. Based on that, the time has come for both the products to chalk out different marketing strategies. They can be competitors in their own right. However, such competition, in my opinion, will only grow the market until we can keep the identity and the product pipeline different from each other.

What plans does DPA/GJEPC have for generic marketing activities in India? What is the demand situation at present in India for diamonds per se? Contradictory reports are seen in the media regarding millennials' love for diamonds. Do you think Indian millennials’ love for diamonds differs from overseas millennials?

The diamond consumer market in India is still under-developed with 7% of world consumption in value. Only 10% of Indian women own a diamond, against 20% in China and 70% in the US. As the Indian middle class grows, we are confident that diamond jewellery demand will grow very strongly and that India will become a major diamond jewellery market over the next decade.

GJEPC and DPA are looking at building ties with the retailer community to capture the opportunity. DPA had launched their multi-channel campaign with ‘Real is Rare’ TV commercial, the campaign reflects the story of a real-life couple. Through a deep dive into consumer mindsets, they found that couples in India often traverse a rich but at times difficult emotional journey, as they go from marriage to real intimacy and love, from being a couple on paper to be a real couple in life. The campaign received an overwhelming response from the audience as they related to the proposition that DPA aims to deliver.

According to a recent study by the World Diamond Council, 89% of US millennial-aged women rank authentic as the key value when they consider making luxury purchases such as diamonds. Similarly, in India as per a survey speaking to 25 to 40 years, it is found that in this world of fake news, authenticity is key -- whether it’s their relationships or the diamonds that they want to buy.

Diamond financing has always been a bane for SMEs in the Indian diamond industry. But it is said that the situation has worsened after the PNB scam. What is the situation with the bankers currently? How is GJEPC helping industry players to meet the many challenges they are facing besides low profitability, bank finance, etc.?

There has been at least a 10 per cent decline in bank finance to the gem and jewellery sector which is going to adversely impact exports out of the country. This also implies that gem & jewellery exports for the FY 2018-19 will see a drastic drop of 10% as well.

Post the recent incident, banks and other financial institutions have become stringent and are insisting on a much higher collateral security against bank finance.

In addition to commissioning MyKYC Bank, GJEPC is working with the bankers to explain them and create the institutional interface between the bankers and industry which we hope will take care of the situation.

We are also in talks with ECGC for recognising the good work done due to the introduction of MyKYC and restart extending Whole Turnover Policy cover to exporters from gem & jewellery industry.

Among the many GJEPC’s initiatives, the Jewellery Park near Mumbai is eagerly looked forward to by the Indian industry. What is the current status of the project? How many jewellery manufacturers will the park accommodate? How soon will it be before the park gets operational? Some details, please.

Currently, the land procurement process is in progress with Maharashtra Industrial Development Corporation (MIDC). Approximately about 5000 units, both large and small, will be accommodated in the Park. To be operational it will take about 3.5 years from the date of commencement of construction of Jewellery Park.

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished