There is a greater need for Indian gold jewellery exporters to develop new markets as nearly 90% of exports now go only to just five countries, a World Gold Council report released on Thursday said. According to the report, over the last few years, the Indian gold market has been grappling with numerous regulatory changes and shifting consumer behaviour. The sector is expected to see further challenges due to changing demographics and a possibility of millennials moving their attention away from gold to other luxury items.
But a boost could come in the form of further proposals that would allow advance payments to overseas precious metal suppliers, as well as the formation of the mega CFCs (Common Facility Centres) in the Santacruz Electronics Export Processing Zone (SEEPZ) of Mumbai and Surat, the report said.
Also, e-commerce opportunities are increasing and a more robust regulatory structure would support online gold jewellery sales at home and abroad, the study found. According to the WGC report, weddings, religious festivals and agriculture have been driving gold demand in the country as gold is deeply embedded in the country’s culture and purchases are often driven by tradition. As always, South India continues to dominate gold jewellery consumption, accounting for 40% of the country’s total jewellery demand. Southern demand remains high due to consumers’ affinity for plain gold jewellery, high per capita income, and low poverty levels. Those living in states like Kerala have high incomes due to large financial inflows from the Gulf, while Tamil Nadu and Karnataka are the country’s manufacturing and IT hubs respectively, according to the survey.
