Gems & Jewellery

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Gujarat: Economic Snapshot

11.36%

15.99%

17.95%

Primary

Secondary

Tertiary

Source: Socio Economic Review 2007-08

Gross State Domestic Product : USD 45.3 Billion

Exports : 19.2% of India

Per Capita Income : USD 722

Industrial Growth Rate : 12.5% (2002 – 2007)

Inflation : 9.3%

Urbanisation : 37.36%

Gujarat has exhibited a 12.5% high industrial growth rate from 2002 -2007. In India’s 10th Five Year Plan and has achieved a GDP growth of 10.2% as per the set target,which was the highest amongst all States in India.

Gujarat An Enduring Strong Economy

Well Balanced Growth across sectors Composition of GSDP as per Economic Activity

P r im a ry S e c to r

S e c o n d a ry S e c to r

T e r t ia ry S e c to r

P r im a ry S e c to r

S e c o n d a ry S e c to r

T e r t ia ry S e c to r

18.22%

37.78%

44%

GSDP: Gross State Domestic Product Source: Socio Economic Review 2007-08

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First State to privatize ports

Gujarat is well connected to major cities in the USA, EU, Asia and other Indian metropolitan cities

Rail & Road 71% of the road in the State is surfaced

Robust Infrastructure

§ 42 ports along 1600 km coastline, including 1 major port at Kandla and 41 minor ports

§ Cost efficient transportation of natural gas, crude oil and petroleum products from Middle East and Europe

§ Landmark projects such as LNG port terminal at Hazira developed by Shell India Limited, Green field port at

Mundra developed by Gujarat Adani Port Limited, LNG terminal at Dahej developed by Petronet LNG Ltd.

and Pipapav port developed by Gujarat Pipapav Port Ltd.

§ 13 airports under the operational jurisdiction of Airports Authority of India (AAI), at Vadodara, Surat, Jamnagar,

Rajkot, Bhavnagar, Porbandar, Bhuj, Diu, Mandvi, Mundra, Kandla and Palanpur, including one international

airport at Ahmedabad

Ports

Airports

§ State-of-the-art road infrastructure such as India’s first National Expressway from Ahmedabad to Baroda.

§ Total road length is 74, 111 Km

§ Total length of railways in Gujarat is 5,188 km (8.25% of India)

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Power

Total length of the existing GSPL pipeline is 1,453.16 kilometers supplying to 18 districts Gas

Water Only State to carry out interlinking of rivers

Electricity Generation Capacity – 9,561 MW (2007) and estimated to rise to 14,031 MW (2012)

Robust Infrastructure

§ Per capita power consumption is 1,354 units whereas India’s average is 665 units

§ Rich availability of natural gas (34 MMCD) and Lignite (1,072 MMT)

§ 24-hour power supply to 98% of the villages

§ The pipelines of Gujarat State Petronet Limited (GSPL) supply gas to 13 districts, 5 more districts are proposed

to be connected by the pipeline

§ Total length of Integrated Gas Grid supplying gas to all districts is 2,200 km, of which 1,200 km is complete

and 800 km is under construction

§ An extensive water grid network across the State

§ The water grid is a network of 75,000 km for water distribution for irrigation

§ 75% population proposed to be covered by the grid by 2010

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Kutch

Jamnagar

Porbandar

JunagadhAmreli

Bhavnagar

Rajkot

Surendranagar

Banaskantha

PatanMehsana

Himmatnagar

Kheda PanchmahalDahod

Vadodara

Bharuch Narmada

Surat

Navsari

Valsad

Anand

GandhinagarAhmedabad

Invest in Gujarat : A world- class Business Destination

Knowledge Corridor

Chemicals, Petrochem. Pharma, Textiles &

Engineering

Industrial Corridor(DMIC)

51 Special Economic Zone (SEZs) across

Gujarat

Gujarat International Finance Tec City

Petroleum, Chemicals and Petrochemicals Investment Region

(PCPIR)

Bio-Tech Cluster

Soda Ash & Salt Based Industries,

Cement & Steel Pipes

202 Industrial Estates across Gujarat

Soda Ash and Salt Based

Engineering and Ceramics

18 Captive Ports along 1600 km coastline

across Gujarat

Special Investment Region (SIR)

Petroleum & Brass parts

To Delhi

To Bombay

Savli Biotech Park

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Presence Across Industry Sectors

Gujarat: A Thriving Industrial State

30%

22%

19.20%

17%

15.60%

14%

9.90%

9.50%

6%

5%

Stock market capitalisation

Longest Coastline

Exports

Fixed Capital Investment

Value of Output

Net Value

Factorories

Employees

Geographical Area

Population

18%

25%

28%

35%

42.30%

50%

58%

65%

80%

85%

98%

Textiles

Sea Cargo

Pharmaceuticals

Cotton

Groundnut

Chemicals

Petrochemicals

Plastic Industry

Diamond Processing

Salt Processing

Soda Ash Production

Contributing to India’s economy across all major sectors…

With 5% of population and 6% of Geographical Area contributes 16% of output

Petroleum products

Chemical & Pharma

Engineering

Food processing

Textiles & Apparels

Mineral based industries

Others

34%

23%

17.6%

10.3%

6.3%

2.50%

6.30%

…World’s largest producer of processed diamonds and wall

clocks

…World’s largest gas based single location sponge iron plant

…World’s largest producer of castor and cumin

…World’s 3rd largest producer of denim

…Asia’s largest grass root petroleum refinery at Jamnagar

…India’s largest producer of cotton

…India’s first LNG Chemical Port Terminal at Hazira

Significant share in key industry sectors & products

Source: Socio Economic Review 2007-08

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The Indian Gems & Jewellery Industry § The global market for gems and jewellery is estimated to be worth

USD 85 billion with key markets such as South Africa, USA, Italy,

Belgium and Israel having registered an average compounded annual

growth rate (CAGR) of 5-10% in the last decade

§ The global market for gold is estimated to be 3,300 tonnes

§ India’s exports in Gems & Jewellery was USD 20.89 billion in 2007-08

§ The sector contributes 13.4% to India’s total exports

§ 11 out of 12 stones set in jewellery are cut and polished in India

§ Diamonds processed in India account for 55% share in terms of value,

80% in terms of cartage and 90% in volume, of the total world market

§ 94% of global workers involved in diamond industry are in India

§ Total estimated jewellery sales in India is expected to reach USD 21

billion by 2010 and USD 37 billion by 2015

India’s position in the global market

Ø World’s largest hub for diamond processing

Ø Largest consumer of Gold in the world

Ø 2nd largest producer of gold jewellery in the world

Ø World’s largest cutting and polishing industry

Source: India Brand Equity Foundation (IBEF) Report on Gems & Jewellery, Gems & Jewellery Export Promotion Council (GJEPC)

Table 1: Indian Gems & Jewellery Industry Snapshot(2006-07)

27%Diamond Jewellery market growth

15%Gold Jewellery market growth

USD 1.2 billionDiamond Jewellery

USD 13.5 billionJewellery market size

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Gujarat: The Gems & Jewellery Hub of India§ Gujarat accounts for 72% of the world’s share of processed

diamonds and 80% of total diamonds processed in India

§ Almost 8 out of 10 diamonds in the world today are processed in Gujarat

§ Diamonds processed in Gujarat were estimated to be worth USD 9000 million (2004-05), constituting 80% of India’s total diamond exports

§ 90% of total diamonds in Gujarat are processed by about 10,000 diamond units located in and around Surat

§ Surat is referred to as the “Silky City Sparkling with Diamonds”

§ The State is home to several Centers of Excellence such as the Indian Diamond Institute, which offer courses related to the Gems & Jewellery

industry

§ Surat, Ahmedabad and Rajkot are the major gems & jewellery clusters

§ Rajkot is internationally known for its unique hand made gold and silver ornaments which constitute 85% of the total jewellery production in India

Source: IBEF Report on Gems & Jewellery, 2006, Bureau of Indian Standards

AhmedabadShradha Assaying & Hallmarking Center

AhmedabadParkar Gold

SuratNational Center for Hallmarking

AhmedabadMMTC Ltd.

RajkotVG Gold Assaying & Hallmarking Centre

SuratIndian Diamond Institute

VadodaraGujarat Gold Centre

AhmedabadKesar Hallmarking Centre

AhmedabadGujarat Gold Centre

DistrictCenter Name

Table 2: Assaying & Hallmarking Centers in Gujarat

Surat

Rajkot Vadodara

Ahmedabad

Map 1: Gems & Jewellery Clusters

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Value Chain Analysis

Source: Report on “The Global Gems & Jewellery Industry, Vision 2015:Transforming for Growth”

Mining GemstoneProcessing

Jewellery Manufacturing

Jewellery Retailing

Diamond, Gemstone, Gold

PlatinumCutting

& PolishingDesign &

FabricationStudded Jewellery

Expanded Diamond Value Chain

Sourcing Rough Trade ProcessingMining

Silver & Others

Platinum

Gold

Diamond

ConsumptionFabricationProcessingMining

Established Presence Emerging Centre / Market

Gujarat’s Presence in the Gems & Jewellery Value Chain

Not Applicable in Gujarat

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Leading Industry Players

§ The group’s core business is the export of polished diamonds & diamond studded jewellery and

manufacture of diamonds & jewellery

§ The group has a large network of marketing offices spanning across USA, Hong Kong, Belgium, Japan,

Australia, Canada & Singapore

§ Sanghavi Exports has a hi-tech diamond manufacturing factory, Sanghavi Diamond Manufacturing at

Surat, which is one of the largest units in Asia

§ The group manufactures polished diamonds and diamond jewellery

§ Karp’s diamond manufacturing facility is located at Surat

§ Key manufacturer and exporter of diamond jewellery

§ The Company’s products include diamond jewellery, gold jewellery & loose diamonds

§ Founded in 1969, the Company is based in Surat, and its business includes diamond processing

§ They manufacture a wide array of diamonds including round brilliants, emeralds, radiants, ovals, pears,

and marquises, ranging from 0.50 cents to 5 carats and above, D to K colours and IF to 13 purities

§ In 1996, Venus Jewels developed a grading system – the Venus Grading System based on

standardization in grading and rational price structure

§ Pioneered the concept of online stock for increasing sales

Business DescriptionCompany

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Small Industry Clusters

JewelleryValsad

Gemstone (Agate)Khambhat

Gold & Silver JewelleryRajkot

Diamond processingNavsari

Diamond processingBhavnagar

Diamond processingPalanpur

Diamond processing, JewellerySurat

Diamond processing, Gold & Silver Jewellery

Ahmedabad

Gems & Jewellery ClustersRegion

Ahmedabad

SuratBhavnagar

Valsad

Palanpur

Navsari

RajkotKhambhat

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007, Indian Diamond Institute

Table 3: Gems & Jewellery Clusters Map 2: Gems & Jewellery Clusters

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Multi Product

Sector StatusArea(Hectares)

Developer

Functional50Diamond and Gem Development CorporationSachin, Surat

Adani Exports, Zaveri Exports, KK Jewels, Gem Star Co. Pvt. Ltd., Himson International, Schurter Electronics, Ginza Industries, Royal Home Textiles etc.

Major clients

Textiles, Garments, Made ups (pillows, quilts, bedsheets, etc.), IT Hardware, Engineering Goods, Pharmaceuticals, Chemicals, Gems & Jewellery, Diamonds, Tobacco

Major Industries located in SEZ

Support Infrastructure such as power, water, drainage, Common Effluent Treatment Plants (CETPs)Jewellery Training Institute in the premises140 residential dwelling units , School, Medical Center,Recreational facilities

Availability of Infrastructure

Nearest NH/SH: National Highway 8 (13 km), Navsari- Surat State Highway (3 km)Nearest Rail Head – Sachin (1 km)Surat Airport – 15 kmNearest Port (JNPT) - 260 km

Connectivity

Surat

Special Economic Zone – SUR SEZ

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007

162 functional units31 new units planned

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Special Economic Zone – Gems & Jewellery SEZ

Upcoming74Gems & Jewellery SEZ Gujarat Hira BourseIchhapore, Surat

StatusArea(Hectares)

Developer

Surat

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007

Connectivity Nearest NH/SH: NH No. 6 (Extension) , SH ONGC – MagdallaNearest Rail Head – Surat (18 km), 8 km from Surat Airport

Other Provisions available

Training facilities for skilled manpower, Medical Facility, Recreational Facility, Health Club, Creche etc.

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Educational Infrastructure§ Major institutions offering courses specific to Gems & Jewellery

Ø Indian Diamond Institute (IDI), Surat

Ø National Institute of Fashion Technology (NIFT), Gandhinagar

Ø National Institute of Design (NID), Ahmedabad

§ Graduate and Diploma Level programmes offered by Indian Diamond

Institute include

Ø Diamond Sorting and Grading

Ø Gemology

Ø Jewellery Designing, Manufacturing and Appraising

Ø Jewellery Business Management

Ø Gem Diamond Identification and Grading

Ahmedabad

Surat

Gandhinagar

Source: Official website of Indian Diamond Institute

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Initiatives by Government of India

Foreign Trade Policy

(2004 – 09)

§ Exemption of Service Tax on services (related to

exports) which are rendered abroad

§ Introduction of re-import of Diamonds and Jewellery

exported on consignment basis

§ Incorporation of the testing facility at International

Diamond Laboratory, Dubai, to reduce transaction costs

for the diamond sector

§ Duty free import entitlement of tools, machinery and

equipment

Other Provisions

§ Nil custom duty to import rough and polished diamonds

§ Import of precious metal scrap and used jewellery for

melting, refining and re-export of jewellery

§ Indian Government’s decision to allow 51% FDI in

single brand retail stores has led to a number of

international branded stores actively considering an

entry into the Indian jewellery retail market

Initiatives by Government of India

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007

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Initiatives by Government of Gujarat

Cluster Development Scheme

25% contribution to the project proposal for training programmes

Contribution of 25 – 50% of the cost component of the proposal in other matters

Financial Assistance to Industrial Parks

Industrial Park

(Provision for the location of minimum 30 industrial / service units) – 20% of fixed capital investment upto maximum of INR 100 lacs

Mini Industrial Park (Minimum 11 units)

25% of fixed capital investment upto a maximum of INR 100 lacs

Initiatives by Government of Gujarat

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007

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SEZ AdvantageFor SEZ Units

Income Tax Incentives§ 100% tax holiday for a period of any 10

consecutive years out of 15 years beginning from the year in which the SEZ is notified§ Exempt from dividend distribution tax§ Tax exempt on Interest of long term finance§ Long-term capital gains arising on transfer

of shares in developer company tax exempt§ No minimum alternate tax (MAT)

For Developers of SEZs

Income Tax Incentives§ 10 year corporate tax holiday on export

profit – 100% for initial 5 years and 50% for the next 5 years

Common Incentives

Indirect Tax Incentives

§ Nil customs duty

§ Nil excise duty

§ Exemption from central sales tax

§ Exemption from service tax

§ Exemption from securities transaction tax

§ Exemption from tax on sale of electricity for self generated and purchased power

Other Benefits

§ Exemption of electricity duty

§ Duty free procurement of capital goods (including second hand capital goods), raw materials and consumable spares from domestic market

§ Full freedom for sub contracting

§ Facility to realize and repatriate export proceeds within 12 months

§ Facility to retain 100% foreign exchange receipts in the export earners foreign currency account

Other Benefits§ Full freedom in allocation of developed

plots to approved SEZ units on purely commercial basis

§ Full authority to provide services like water, electricity, security, restaurants and recreation centres on commercial lines

§ No net foreign exchange earning requirement imposed

SEZ scheme has been introduced to provide hassle free environment and state of the art infrastructure Gujarat has liberal labour policy providing complete flexibility in SEZs SEZ Development Committee monitors infrastructure development for each SEZ

Source: Industries Commissionerate / iNDEXTb, Government of Gujarat, 2007

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Jewellery Fabrication§ White Gold§ Platinum Jewellery§ Paved Diamond Jewellery§ Studded Jewellery§ Mesh Jewellery§ Synthetic Diamonds

* Detailed Project Profiles for investment opportunities available at www.indextb.com

Investment Opportunities

Infrastructure Development§ Jewellery Manufacturing Units

§ Assaying and Hallmarking Centres

§ Gold Refinery

§ Diamond Park

§ Technology Upgradation

Jewellery Retail§ Luxury Products such as Watches, Brooches, Clocks

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Connecting Further….

Industries Department, Government of Gujarat

Industrial Extension Bureau (iNDEXTb)

Gujarat Industrial Development Corporation (GIDC)

Gujarat Infrastructure Development Board (GIDB)

http://www.gujaratindustry.gov.in

http://www.indextb.com

http://www.gidc.gov.in

http://www.gidb.org

Industries Commissionerate, Government of Gujarat http://www.icgujarat.gov.in

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