In January, 21 Indians amongst 33 foreigners were arrested in Shenzhen for smuggling diamonds worth millions of dollars from Hong Kong to mainland China to avoid the 4 percent import duty.
Though being a part of China, Hong Kong is a duty-free import area for rough diamonds while China demands the custom duty of 4 per cent.
That’s the reason not only Indian jewellery makers but many others supply the products to Hong Kong first and then to Shenzhen.
Indian diamond jewellery manufacturers are still exploring the potential in the market of China even after the recent arrest.
The arrests were made in the second week of January in the southern China city of Shenzhen. But the arrests had no impact on the willingness of Indian jewellery companies to flourish in China. China has proved as a large retail market and Indian companies wish to radiate from the US market as it involves more risk.
Gems & Jewellery Export promotion Council, the trade body set by the Union ministry of commerce has for the first time planned to participate in all the exhibitions there.
Every year China hosts four mega gems and jewellery events and till now India made its presence as a visitor but now GJEPC is encouraging members to publicize the products in exhibitions as said by Vasant Mehta, Chairman of Council.
They are even willing to organize road shows of Indian jewellery designs in the major cities along with the annual buyer-seller meet, scheduled for later this year. The group executive director of one of the leading jewellery exporters Shrenuj & Company Ltd, Vishal Doshi is looking for retail chain accomplishments in China.
When questioned he said, “It is premature to talk about the specific plans.” The company may set up independent retail jewellery stores for a strong foothold in the market. Global economic recession that affected the jewellery sales forced Suashish Diamond from making an investment of $5 million for a manufacturing unit.
The integrated jewellery manufacturer and retailer Gitanjali Gems is also looking for possibilities in China. Managing director Mehul Choksi feels that Chinese market can’t be ignored.
The country’s population and the caliber of middle class is what attract the jewelers. Mehta said that the people in China have developed their love for gold and diamond jewellery in past one year and Indian jewellery manufacturers can overcome the market with the slowdown going in the US and EU.
Us still continues to be the market leader as it consumes 40 per cent of global finished jewellery sales but the growing potential of China is causing a threat to US.
“I believe China will overcome the US in jewellery sales in the next five to seven years,” said Mehta. For the first time GJEPC has planned to invite Chinese jewellery delegation to India for International Jewellery Show scheduled between August 19 and 23 2010 in Mumbai.
Hopefully this would create new opportunities for Indian jewellery market to establish a strong foot holds in Chinese market.