India is currently number two in gold jewellery consumption by volume, number four in platinum jewellery consumption by volume and number one in diamond jewellery consumption by volume. The country will remain the most important market for precious jewellery in terms of potential for many years to come. For one, demand for precious jewellery is already formidable because of strong cultural traditions and yet more than 90% of adults in India possess wealth valued below US$10,000.
However, that is a story for the future. In the present, consumption of precious jewellery in India gained momentum in the aftermath of the Global Financial Crisis as Indians rode the wave of gold price inflation, encouraged by stronger economic growth and lower inflation. Consumption of precious jewellery subsequently lost momentum when the situation reversed. Economic
growth is now weaker and Indian consumers are currently battling higher inflation.
Jewellery sales in India will experience slower growth in the period 2013-2016 than in the period 2009-2012. The culprits will be ongoing weakness in consumer spending which has been hit by rising inflation, lower real wage growth and a poorer macro-economic environment.
Demand for gold in jewellery manufacturing should oscillate in the 500-650 tonnes per year range, on the back of continued modernisation of sales channels in India and the expected rise in the number of middle class consumers.
In the following pages, you will discover our views on the consumption of precious jewellery in India as well as discover our ideas on the likely direction of such consumption in the future. You will also get to find out why we selected India as the most promising market for precious jewellery for many years to come.
For our purposes, we define precious jewellery as jewellery pieces made of gold, platinum or silver, in their pure form or combined with other lesser metals like copper. Such jewellery pieces can be in plain form or gemset precious jewellery. In the gemset category, this report provides extended study of polished diamonds consumption in India.