Business Setup in India: Indian Gems and Jewellery Industry: eBizWire by StartBizIndia


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Gems and Jewellery Business in India;
Business Idea of the Month: Imitation Jewellery

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Business Setup in India: Indian Gems and Jewellery Industry: eBizWire by StartBizIndia

  1. 1. F o r m o r e i n f o o n B u s i n e s s s e t u p v i s i t w w w . s t a r t b i z i n d i a . i nP a g e | 1 For Business setup queries email atnitesh@indiacp.comor call at 011 40622249InsightBiz India News 2Biz Policy Updates 3The Indian Gems & Jewellery Industry 4Business Idea of the Month 8Upcoming Business Summit 9Contact us 10eBizWireVol. II Issue. I, April 2013Industry of the Month“The Gems & JewelleryIndustry”
  2. 2. F o r m o r e i n f o o n B u s i n e s s s e t u p v i s i t w w w . s t a r t b i z i n d i a . i nP a g e | 2 For Business setup queries email atnitesh@indiacp.comor call at 011 40622249Sweden based Rusta to set up its retail operations in IndiaThe furniture and leisure products manufacturer which has been sourcing finishedproducts from India for the last one decade plans to set up its retail operations in thecountry. Once all the investment is made, India will rank as the company’s secondbiggest market for sourcing after China.Delta faucet opens up in IndiaAmerica’s top brand for faucets, the Delta Faucet Company opened up its outletcalled “Dream Kitchens” in Hyderabad, the first in India. It shall display a slew offaucets and related products for the kitchen space. After this flagship store, theCompany plans to set up 20 more stores by the year end.MNCs choose India for Information Technology UnitsZinov, one of the leading management consulting companies globally has estimatedthat in the next few years, almost 50% of the Fortune 500 Companies will have theircaptive centers in India working on business processes, technology and othermatters. What contributes to India being a preferred location is the fact that almost200 wholly owned IT and ITes centers of MNCs are already operating in India.India – one of the best cement markets in AsiaHolcim, the Switzerland based cement major that operates in India through ACC andAmbuja Cements considers India as one of the best cement markets in Asia, which isplanning to expand its production capacity in the Country. It has been the said thatthe prospects for cement companies are high owing to demand for infrastructureexpansion projects and need for low-cost housing.India emerges as an export hub for SUVsGlobal automobile majors plan to leverage on India’s cost competitive manufacturingpractices. Demand for sedans and utility vehicles is increasing in the country and theauto-makers plan to make use of the excess capacity by exporting the SUVs todeveloped markets like Europe, Japan, Latin America and AustraliaIndia has the best production units in the World – Car ManufacturersMultinational Automotive plants in India are among the top in the world in terms ofproductivity and quality. Top Companies like Hyundai, Toyota and Suzuki usuallyrank their Indian manufacturing facilities on top as opposed to production centers inthe rest of the world.Sweden based Rusta to set up itsretail operations in IndiaDelta faucet opens up in IndiaMNCs choose India for InformationTechnology UnitsIndia – one of the best cementmarkets in AsiaIndia emerges as an export hub forSUVsIndia has the best production unitsin the World – Car ManufacturersHeadlinesBiz India News
  3. 3. F o r m o r e i n f o o n B u s i n e s s s e t u p v i s i t w w w . s t a r t b i z i n d i a . i nP a g e | 3 For Business setup queries email atnitesh@indiacp.comor call at 011 40622249Biz Policy UpdatesFDI Policy April 2013New FDI Policy, April 2013The Department of Industrial Policy and Promotion, Government of India (DIPP)notified the new consolidated policy on Foreign Direct Investment (FDI) on 5thApril, 2013. Barring a few changes, this policy is more of a compilation of circularsissued by Reserve Bank of India in the past one year. The major changesintroduced through this policy are as follows:1. Foreign Direct Investment (FDI) in Limited Liability Partnership (LLP)The Indian Companies with FDI are allowed to convert into LLPs subject tothe FIPB/ Government approval based on a certain conditions. In this respect,the condition regarding foreign capital participation only by way of cashreceived through inward remittance/ debit to NRE/ FCNR account maintainedwith an AD bank, has been dispensed with.2. Conversion of ECB/ Lump Sum Fee/ Royalty, etc. into EquityThe companies are allowed to issue equity shares against the import ofcapital goods/ machinery/ equipment (excluding second-hand machinery),subject to compliance with the various conditions specified in the FDI Policy.In this regard, the requirement of independent valuation by a third party of theabove items imported, along with production of copies of documents issuedby the custom authorities towards assessment of the fair value of suchimports has been dispensed with.3. Transfer of shares/ convertible debentures from Resident to NonResidentIn the context of transfer of shares between a resident and non-resident, theambit of the term ‘Person Resident outside India’ now includes incorporatednon-resident entity, foreign national, NRI, FII other than the erstwhile OCB.4. Foreign Investment in Asset Reconstruction CompaniesThe overall investment limit for investment in ARCs has been increased to74% from 49% under the Government Route. The increased limit is overalllimit for both investment by way of FDI & FII. Earlier Person residents outsideIndia were not allowed to invest in ARCs through FII mode. Someamendments to the conditions for investment in ARCs have also been made.Amendments through different notifications, circulars, and press notesduring the period i.e. from 10.04.2012 to 05.04.2013 have beenincorporated in the new consolidated FDI policyLegal Headlines
  4. 4. F o r m o r e i n f o o n B u s i n e s s s e t u p v i s i t w w w . s t a r t b i z i n d i a . i nP a g e | 4 For Business setup queries email atnitesh@indiacp.comor call at 011 40622249Think – traditional Indian woman. It is unlikely that you will miss out on theelaborate jewellery she adorns in her picture in your mind. Jewellery has been apart and parcel of a woman’s life in India. Centuries have come and gone butjewellery, especially gold and silver, have very permanently become a part ofIndia’s culture – little girls seeing their grandmother’s jewellery with their twinklingeyes, dreaming to wear it once they have gracefully transitioned into grown upladies. No wonder, the Gems and Jewellery Industry in India is one that is veryimportant for the country, not only for its culture but also for its economy.The Indian Gems and Jewellery Industry is one of the fastest growing industries inIndia which contributes to earning an appreciable amount of foreign exchange forthe country’s treasury every year. The industry covers a wide range of activitieswithin its periphery, from procuring raw material from other countries, the talentedartisans and craftsmen of India transforming them into adorable and beautifulhandcrafted pieces to selling the items not only within the country but exportingthem to bigger markets abroad as well.India- a rich land, quite literallyIndia is a land rich in gemstones and precious metals with significant reserves ofgold, diamonds, rubies, emeralds, sapphires and other precious and semi-preciousstones. As per the Geological Survey of India, India houses almost 9% of theglobal gold deposits with most of it concentrated in the Deccan part. Some majorstates with reserves of precious stones can be seen below:STATE KNOWN FORJammu & Kashmir Blue SapphiresOrissa Considered the Brazil of India, has a host ofgemstones like rubies and other gemstones likegarnet, aquamarine, etc.Madhya Pradesh The most important diamond producing centre inIndiaChattisgarh DiamondsRajasthan Emeralds, aquamarines & other gemstonesAndhra Pradesh Gold, diamonds, cat’s eye, rubiesKarnataka Diamonds & RubiesTamil Nadu A host of gemstones including sapphires, rubies,alexandrite, etc.Gems & Jewellery Industry in India
  5. 5. F o r m o r e i n f o o n B u s i n e s s s e t u p v i s i t w w w . s t a r t b i z i n d i a . i nP a g e | 5 For Business setup queries email atnitesh@indiacp.comor call at 011 40622249Gems & Jewellery Industry in IndiaThe Gems & Jewellery MarketWith 80% of the share in the market, gold rules the roost in India while theremaining market share is taken by other jewellery including diamond studded andother gemstones studded jewellery. This portion also includes the demand forplatinum which on the face of it seems like very less demanded metal. But compareit to the fact that the platinum’s demand in the World is driven by India and China,and the figure starts to look bigger.Where the size of the Indian Gems & Jewellery Market was USD 30.1 Billion in2011, it is expected to become USD 45 Billion by 2015.Why Invest in the Indian Gems & Jewellery Industry?India offers an attractive investment and business opportunity for big playersinterested in establishing a strong foothold in the Country. This can be attributed tovarious factors like the Country’s growing domestic market and especially thegrowing middle class, the export advantage existing in the industry because ofThe Indian Gems& JewelleryIndustryGoldRich CulturalHeritageShineMalleabilityDuctilityDiamondsIncrease inurbanizationIncrease indisposableIncome"Diamonds areforever"ColoredGemstonesCheaperalternativeColorCoordinationwith attireReligiousassociation of acolorSome Interesting Facts! **Taken from various sourcesIndia is the world’s largestconsumer & importer of GoldIndia is the largest cutting &polishing industry fordiamonds in the WorldThe Indian Gems & jewelleryIndustry employs about 3.4million peopleIndia is one of the firstcountries to introduceDiamonds to the worldIndia accounts for more than20% of the World’s total goldconsumptionIndia exports 95% of theWorld’s diamonds (Includesdiamonds imported forcutting and polishing)
  6. 6. F o r m o r e i n f o o n B u s i n e s s s e t u p v i s i t w w w . s t a r t b i z i n d i a . i nP a g e | 6 For Business setup queries email atnitesh@indiacp.comor call at 011 40622249renowned Indian craftsmanship and the FDI Policy and a host of other initiativesundertaken by the Government of India. Not only this, various factors like low costof production and skilled but low cost craftsmanship, help maintain a healthycompetition in the Industry.The main foreign markets for the industry are Europe, USA, UAE and Hong Kong.Some of the newer markets which are being focused on by the industry players arethe Latin America, Russia and Africa.Government Support for the Indian Gems and Jewellery Industry:The Indian Government has taken various initiatives to help in the furtherdevelopment of the industry. These can be noted as:1. The FDI Policy:a. 100 % FDI in the industry through automatic route in the gemsand jewellery sectorb. 74% FDI under automatic route for exploration and mining ofdiamonds and precious stones.c. 100% under the automatic route for exploration and mining ofgold and silver and minerals other than diamonds and preciousstones, metallurgy and processing2. The Foreign Trade Policy;a. Duty Free Import Entitlement of consumables, tools andadditional items allowed to extents as specifiedb. Duty Free Import Entitlement of commercial samples up to INR3,00,000c. Personal Carriage of Gems and Jewellery up to USD 5 Millionallowed for holding/ participating in overseas exhibitionsd. Designated Diamond Dollar Accounts for businesses with a trackrecord of import/ export of gems and jewellery and an annualturnover of INR 3,00,00,000e. An Export Oriented Unit (EOU) in the Gems and Jewellery Sectorshall be permitted to:i. Export for holding/ participating in exhibitions abroadii. Personal Carriage of gold/ silver/ platinum jewellery,precious & semi-precious stones, beads & articlesiii. Display/ sell in permitted shops set up abroadiv. Set up showrooms/ retail outlets at International AirportsGems & Jewellery Industry in India
  7. 7. F o r m o r e i n f o o n B u s i n e s s s e t u p v i s i t w w w . s t a r t b i z i n d i a . i nP a g e | 7 For Business setup queries email atnitesh@indiacp.comor call at 011 40622249Starting your own venture in the Industry:Clearly, for the kind of benefits and the environment offered by the Company to theGems & Jewellery Industry in India, doing business in this industry can prove to bevery lucrative if done in the right manner. Whether it’s a designer boutiqueshowcasing a line of jewellery you designed or a retailing outlet for jewellery itemsyou purchased from a supplier on wholesale basis.Steps to start a jewellery business:1. Registering your business: You could choose to set up your businessas a proprietorship, a partnership firm or a company. Check the availabilityof the name you prefer and register your business.2. Get registered with Tax Authorities: Obtain the basic numbers from taxauthorities like the PAN, TAN, TIN and the Service Tax Number so thatyou are able to pay all the necessary taxes.3. Open a Bank Account: Businesses need to open current accounts withowing to large number of transactions in a day. Having a separate bankaccount will keep things streamlined.4. Choose a location: Choose where you want to set up the business.Depending on the alternatives available to you, you could lease, rent orpurchase a building.5. Find a supplier: If you are not designing your own jewellery items, youwould want to locate a supplier who will be able to supply good qualityitems at cheaper prices to you, something which will bring you moreprofits.6. Get your stocks insured: As the inventory involved in this business isvery expensive, it only makes sense to insure your stocks against theftand other mishaps.7. Advertising: You would want to make sure you weigh all the advertisingalternatives so that your business and products get ample attention fromprospective customers8. Go Online: Businesses that know how to leverage on the contemporarytechniques go farther as opposed to their counterparts. Making yourselfavailable online will go a long way in helping you expand your customerbase.Starting your own jewellery businessRegister yourbusinessRegister withTax AuthoritiesOpen a bankaccountChoose alocationFind a SupplierGet your stocksinsuredAdvertiseGo OnlineGems & Jewellery Industry in India
  8. 8. F o r m o r e i n f o o n B u s i n e s s s e t u p v i s i t w w w . s t a r t b i z i n d i a . i nP a g e | 8 For Business setup queries email atnitesh@indiacp.comor call at 011 40622249Some important licenses that one should be on a look out for:1. License by Bureau of Indian Standards (BIS) for use of Standard Mark onthe jewellery. (A separate Corporate Hallmarking License is required ifoperating multi-chain outlets)2. Registration with BIS recognized Assaying and Hallmarking Centers3. Certification and grading of cut and polished diamonds of 0.25 Carat andabove from authorized laboratories as per the Foreign Trade Policy4. Import Export Code5. Registration Cum Membership Certificate from the Gem and JewelleryExport Promotion Council (GJEPC)6. Approval of the GJEPC for exporting gold/ silver/ platinum jewellery forexhibitions abroad or export of branded jewellery for display and sale inpermitted shops set up abroad7. Kimberly certificate from GJEPC for foreign trade of rough diamondsThe Indian Gems & Jewellery Industry is one of the most competitive in theworld and shall continue to remain so as long as people continue to focus ontheir appearances, trends and fashion. As changing of such a scenario ishighly unlikely, it will be safe to assume that business activities in the Gemsand Jewellery sector in India will only be on a rise.Major Statures and provisionsapplicable to a Jewellery Business: The Companies Act, 1956 or thePartnership Act, 1932 or the LimitedLiability Partnership Act, 2008 asapplicable The State Shops and EstablishmentAct Service Tax, The Finance Act The State Value Added Tax Act The Income Tax Act, 1961 The Foreign Trade Policy 2009-2014Gems & Jewellery Industry in IndiaBUSINESS IDEA!! – Imitation JewelleryThere are no doubts that the Jewellery Industry is booming - thanks tothe domestic sales and exports. But at the same time, a lot of people arelooking for cheaper alternatives to precious jewellery, something that canbe worn every day.This is a gap which will never get filled completely no matter hownarrower it gets. Start your own business dedicated to selling imitationjewellery which can be afforded by the college kids and office goersalike. Set a standalone shop, start a multi-outlet chain, go online,negotiate with kiosks at the metro stations, set kiosks at shopping malls-the options are as many as you can imagine!
  9. 9. F o r m o r e i n f o o n B u s i n e s s s e t u p v i s i t w w w . s t a r t b i z i n d i a . i nP a g e | 9 For Business setup queries email atnitesh@indiacp.comor call at 011 40622249 The Great India Startup Business Development Conference &Show, BengaluruA Convention organized by MARCONIX, it is aimed at bringing togetherpeople to unlock greatest business opportunities that exist in the currentbusiness scenario. The event will see people exploring new business ideas,secure funding and build teams in an expedition against giant businesses.Date: 20 April, 2013Venue: Bengaluru, Country Club, Sarjapur Outer Ring Road Entrepreneur Extraordinaire, MumbaiAn event that aims to bring together existing & aspiring businessmen andinvestors to share their ideas, thoughts & experiences, this gathering ofpeople is going to be an enormous networking opportunity. 5 entrepreneurswill get to showcase their ideas and attract a willing investor to kick-starttheir venture.Date: 26 April, 2013Venue: Mumbai, Sofitel Mumbai, Bandra Kurla Complex International Fashion Jewellery & Handicraft ExpoThe Four-day mega event dedicated to the Fashion jewellery, handicraft andaccessories industry, will present an opportunity to national / internationalbuyers to source their requirements from all over India under one roof.Date: 26 - 29 April, 2013Venue: NSIC Exhibition Ground, Okhla Industrial Estate, Delhi• The Great India Startup BusinessDevelopment Conference &Show• Entrepreneur Extraordinaire• International Fashion Jewellery& Handicraft ExpoUpcoming Business Summit
  10. 10. F o r m o r e i n f o o n B u s i n e s s s e t u p v i s i t w w w . s t a r t b i z i n d i a . i nP a g e | 10 For Business setup queries email atnitesh@indiacp.comor call at 011 40622249Disclaimer:This paper is a copyright of Corporate Professionals (India) Private Limited. The entire content of thispaper have been developed for the new startups. The author and the Company expressly disclaim alland any liability to any person who has read this paper, or otherwise, in respect of anything, and ofconsequences of anything done, or omitted to be done by any such person in reliance upon thecontents of this paper.Nitesh LatwalE: nitesh@indiacp.comD: +91.11.40622249M: +91 9873521481Visit us atA Venture ofD- 38, 1stFloor, South Extension, Part INew Delhi – 110049T: +91.11.40622200 F: +91.11.40622201E: info@startbizindia.comRitika KharbandaE: ritika@indiacp.comD: +91.11.40622246M: +91 9899180593Contact Us