India’s jewelry retail sector has surged to USD 80 bn from USD 50 bn in 2018

New Delhi [India], June 19 (ANI): India’s jewelry retail sector has surged to USD 80 billion (Rs 6400 billion) in the financial year 2024 from USD 50 billion in 2018, according to a report by Motilal Oswal Financial Services.

The report highlighted multiple drivers that led to the rapid growth of the industry, including rising disposable income, an improving mix for regular wear of jewelry, enhanced product offerings (design, diamonds, etc.), trust-building through mandatory hallmarking by the government, and a better buying experience at organized retail outlets.

The organized retail jewelers accounted only for 36 to 38 per cent of the overall share in the retail segment; however, the majority of the retail jewelry market continued to be dominated by the unorganized/local players, comprising over 500,000 local goldsmiths and jewelers.

The report noted that the total gold consumption in India is 66 per cent for jewelry and the remaining 34 per cent for bars and coins. India’s gold supply is dominated by imports, and the country’s gold market experienced notable fluctuations in imports from FY18 to FY20.

The report stated that the country’s gold imports reached 980 tonnes in FY19 before declining to 720 tonnes in FY20. This volatility was led by various factors, including declines in global gold prices, buoyant economic conditions leading to heightened disposable incomes, and substantial demand for gold due to traditional celebrations and weddings.

However, in FY20, a significant drop occurred in gold imports due to escalating import duties and the initial stages of an economic slowdown.

The report mentioned Tamil Nadu, Maharashtra, Karnataka, West Bengal, and Uttar Pradesh as the top five states for organized retail jewelry stores in India.

In India, weddings and festivals are the primary reasons for the purchase of jewelry. Bridal jewelry still accounts for a significant portion of demand, contributing 55 per cent to the total jewelry demand.

The daily wear jewelry accounts for 30-35 per cent of the Indian jewelry market. The industry is now strategically focusing on manufacturing lightweight pieces to cater to the preferences of younger consumers, especially those who desire daily wear gold jewelry that complements western-style attire.

Fashion jewelry, on the other hand, contributes nearly 10 per cent to the Indian jewelry market.

In the jewelry product segment, bangles and chains are the primary contributors to domestic jewelry consumption, accounting for 60-70 per cent of total sales. These are preferred as daily wear by women. Necklaces contribute around 15-20 per cent of the sales volume, with their sales surging during special occasions, such as festivals and weddings. The remaining 5-15 per cent of sales are attributed to rings and earrings.