The 34th edition of the annual India International Jewellery Show (IIJS) closed today in Mumbai with extremely high levels of business being transacted by every sector in the Indian gem and jewellery production industry.
Industry watchers said the high purchase levels were due to an overall perception that the push towards a more transparent, cashless economy that was kicked off by the government’s demonetisation of ₹500 and ₹1,000 notes in November last year, followed by the introduction of the Goods and Services Tax (GST) in July this year, has had a positive impact on the nation’s economy.
The demonetisation was initially viewed as being catastrophic by a largely cash-transaction jewellery retail industry and many who spoke to GEMKonnect thought it would have serious financial consequences for jewellery retail in India. There was also considerable confusion about the introduction of GST, with the All India Gems & Jewellery Trade Federation (GJF) reporting a 70 percent drop in jewellery sales on July 1, the day the new tax was introduced.
Retailers had, consequently, stopped replenishing stocks and were waiting to see more concrete indications of which way the economy would move in the wake of these measures. Towards the latter part of July, it was becoming increasingly clearer that the measures had positively impacted the economy. Sixty percent of the respondents in a Moody’s poll, said they expected the Indian economy to grow at between 6.5 and 7.5 percent for the next 12 to 18 months.
Indian consumers too, seem to be adapting to the more cashless economy enthusiastically, being generally appreciative of the greater transparency it has engendered.
The strong buying at IIJS was a reflection of this perception and a result of inventory-starved retailers quickly restocking. With the country’s economic fundamentals looking this good, many exhibitors told GEMKonnect that even the customary cancellations of orders that inevitably came when retailers returned home and reassessed the situation outside the trade show environment, were likely to remain low this year.
While there is optimism all round, some manufacturers are concerned about the lead time they will have to manufacture goods before the all-important Diwali festival sales season. This year, Diwali is slated to fall earlier than usual in the end of October, and these manufacturers said they had a very small window to fulfil a very large number of orders.