Vibrant Gujarat! That is what comes to one’s mind while talking of one of India’s most industrialised and fastest developing states. According to the Gujarat Industrial Policy 2009, the state accounts for 22 per cent of the country’s total investment. The state is already a leader in industrial sectors such as chemicals, petrochemicals, drugs and pharmaceuticals, dairy, cement and ceramics, textiles and engineering. The business spirit and friendly policies of the Gujarat state government as well as the availability of skilled manpower makes the state a haven for investors and entrepreneurs.

THE G&J SECTOR IN GUJARAT% Since decades, Gujarat is renowned for its gem and jewellery sector. While Surat is primarily the diamond hub of the nation, the cities of Ahmedabad, Vadodara, and Rajkot are well-known for manufacturing and retailing of plain diamond jewellery, gold jewellery and antique jewellery in. In addition, there are nine assaying and hallmarking centres in the state, to facilitate the jewellery industry.

SPARKLING SURAT

Location: 21.17°N 72.83°E

Surat is the eighth largest metropolitan city in India and the commercial capital of Gujarat. During the Mughal era, the city was India’s primary port. As of year 2008, it had one of the highest GDP growth rates in India - 11.5 per cent. The city is known for textiles, spices, and, of course, diamonds. About 92 per cent of diamonds in the world are cut and processed by about 10,000 diamond units located in and around Surat. The city is the ‘diamond polishing hub of India’ and is popularly referred to as the ‘silky city sparkling with diamonds’.

Apart from the manufacturing of cut and polished diamonds, Surat is also gaining popularity as a retail destination for purchasing jewellery, especially diamond jewellery. Ashwin Singhal of Ajay Vijay & Co Jewellers estimates that the annual size of the diamond and gemstone jewellery retail market in the city is approximately Rs 2,500 crore. He feels the trend will be more towards white gold jewellery studded with precious stones and diamonds; and that the diamonds used will see a grade jump from the basic rounds to fancy stones like marquise, princess, baguettes, or drops.

According to Nikhil Desai of Charu Jewellers, “Right now there is a very huge market for diamond jewellery in Surat. Nowadays, people are going for diamond jewellery instead of gold jewellery. They feel that it is better to buy small size jewellery but in diamonds. Currently, the gold rate is so high that if you go for a plain gold ring, it costs a minimum of around 8,000 to 10,000 rupees; whereas a diamond studded one is available for Rs. 5,000 to 6,000 rupees.”

Over the years, Surat’s jewellery retail sector is steadily becoming increasingly significant for diamonds and diamond jewellery. Nikhil Desai says that as the city is becoming more and more popular in India, as people from various regions of the country come to Surat to buy diamond jewellery. If they have any functions or marriages in their homes, they prefer to buy diamond jewellery from Surat. “Retailing business in Surat is going on very well,” he affirms.

Ashwin Singhal feels that consumer awareness will lead to the industry, particularly the retail sector becoming more professionalised in the near future. He says, “In the forthcoming months I can see that the industry will become more organized, as a result of greater consumer consciousness. Previously, customers wanted only jewellery. Now they want validity, value and they want certificates. The industry will need to hire more professionals. Previously, we needed only sales personnel, customer support representatives, accountants, etc. But now we need MBAs and back office support personnel too. The industry will definitely become more organised in the forthcoming months.”

Doing business in Surat

So what advantages does one have when opening a jewellery manufacturing unit or even a retail outlet in the diamond hub of India? “It depends,” says Ashwin Singhal, “If one wants an open competitive market, then Surat is good for jewellery retailing. But if you want to work for very high margins, then maybe some place like the North Indian region would be good.” As for manufacturing, he explains that there are many incentives provided by the Gujarat government to invest in the state, especially for entrepreneurs who are below 35 years. There are rebates on interests and Value Added Tax. There are various exemptions on taxation in the state and only one per cent VAT is applicable. One can easily source diamonds and gold in the city and there is an abundance of labour and other resources in the city.

Nikhil Desai believes that the city provides good business for anyone who wishes to open a retail outlet. “Everyone knows how Surat is. It is a good city and the people generally buy jewellery. So anyone can open a showroom and get good business,” he says.

Location: 23.03°N 72.58°E

Ahmedabad is the seventh largest metropolitan city in India. Once known as the ‘Manchester of the East’, the city is famous for textiles, drugs and pharmaceuticals, chemicals, and engineering sectors. The city also houses some of the country’s top educational institutes including the Indian Institute of Management Ahmedabad (IIMA) and the National Institute of Design (NID). The Gross Domestic Product (GDP) of Ahmedabad was 65 billion USD in 2008.

Currently, Ahmedabad’s main market is located at CG Road with more than 150 showrooms. Apart from having a different variety of jewellery, each jeweller has different approaches to selling jewellery.

Demand for diamond and fancy gold Jewellery

Ahmedabad has not only has picked up in loose diamond sales, but also has a huge retail market catering to diamond and gold jewellery. According to Manoj Soni of AB Jewels, “The market in Ahmedabad is booming. There is a good demand for diamond jewellery. The main reason is the volatility of gold prices. People want to purchase from a stable market and as the gold price is rising, they are buying diamond jewellery.” He further feels that it would be better that people go for simple plain diamond jewellery with four prongs for long lasting jewellery.

Vipul Mehta of Laxmi Jewellery Export Pvt. Ltd. feels that as the customer is becoming more fashion conscious, high fashion gold jewellery will dictate the trends in the jewellery retail market.

Retailing in Ahmedabad

Manoj Soni believes that changes in retailing of jewellery are already in the process. With the advent of computer-aided design and computer aided manufacturing, jewellery is now manufactured faster and set in the required gold weight. In addition, customers are becoming more aware of the type of diamonds used in the jewellery and ask about the quality of the diamond while purchasing diamond jewellery.

Doing business in Ahmedabad

So what does it take to do business in Ahmedabad – be it a jewellery retail outlet or a manufacturing unit? “Continuous business,” says Manoj Soni. “If the jewellery retailer is doing sales in the right way, then he will not sit idle and will have continuous business. This is gold and diamond rate related market. Everyone would be having a regular income. In addition, Ahmedabad is developing and moving forward in each and every sector."

RADIANT RAJKOT

Location: 22.3000°N 70.7833°E

Rajkot is the 28th largest urban agglomeration in India and ranked 22nd amongst the world's fastest growing cities and urban areas from 2006 to 2020 (as per City Mayors statistics). The city is renowned for the manufacturing of bearings, diesel engines, kitchen knives and other cutting appliances, watch parts (cases & bracelets), automotive parts, as well as forging industry, casting industry, textile printing units, machine tools, share market and software development.

Jewellery in Rajkot

Rajkot is internationally known for its unique handcrafted gold and silver ornaments. In addition, the city is a major bullion centre. More than 50 retail jewellery houses are located in Palace Road. Hiren Parekh of Pratham Diamonds says, “The jewellery market in Rajkot is doing extremely well as compared to other metros as the city is in the centre of Saurashtra where we have small towns like Junagadh, Porbandar, etc. nearby.” He adds, “There are two gold jewellery manufacturing hubs in India – one is Kolkata and the other is Rajkot. The city, which is famous for the workmanship of its highly skilled artisans, specializes in antique jewellery. The city’s importance as a jewellery manufacturing centre can be gauged from the fact that during IIJS, exhibitors have now started displaying signs reading “Rajkot jewellery available at our store”. Out of all the antique jewellery you see in Mumbai, and other Indian cities and other countries, 60 per cent has been created in Rajkot.”

Doing Business in Rajkot

As the region houses many industries, getting work done via machinery and tools does help. Hiren Parekh feels that the region offers a lot of benefits to the manufacturer as well as the retailer. He believes that as compared to cities like Mumbai where jewellers do not keep large stocks, people tend to go from one jeweller to another while buying. On the other hand, retailers in Rajkot carry huge stocks of jewellery for the customer to choose from. In addition, people in Rajkot are trustworthy to do business with.”

For a retail outlet that has been since ages in the city, Haresh Soni feels that having a brand image for the store is a big boost to having a good business in any city – be it Rajkot, Mumbai, Pune or Secunderabad. He further states that having been in the city for long has helped his retail outlet earn some goodwill. One cannot expect overnight miracles or development. One has to offer proper services at the proper time. Then only one can expect something."

Location: 22°18′00″N 73°12′01″E Baroda, also known as Vadodara, is the third populated city in Gujarat following Ahmedabad and Surat. Major industries in the area include petrochemicals, engineering, pharmaceuticals and plastics.

Jewellery market in Vadodara

There is a strong presence of the jewellery retail market in Baroda. Hiren Patadia of Radhika Jewels says, “As compared to many other cities, the jewellery retail turnover in Baroda is very good. Here retailers have an awareness of the diamond trade. Selling diamond jewellery to consumers is also very easy.”

Doing Business in Baroda

Having a retail outlet in the same city where the manufacturing unit is located provides an easy access to customers, even to those coming from semi urban areas. Apart from the transportation and the travelling cost, the state offers maximum safety to the commuters. While the government offers various tax sops, the production is not hampered, as the electricity is available 24/7.Trustworthy skilled employees are also easily available.

Talking about the Gujarat jewellery industry, Girish Gandevikar quotes, “The jewellery manufacturing industry will flourish. The small-scale retailers would decline in number and the large-scale retailers would enter the production line. And today’s educated customer demands precision, quality and personal touch from jewellers and so the manufacturers as well as the retailers in the business have to be well ahead of the customers in their knowledge of the wares they sell. The jewellers should do their business with the conviction that they practice what they preach in order to gain the confidence of their customers. When corporates are entering this industry with a bang, retailers can create their own niche by adopting innovative technology and professional talent not only for the year 2010, but for the years to come.”

As people from across India visit Gujarat for their jewellery purchases, the jewellery retail segment in the state is becoming a force to reckon with. The open competition, good infrastructure, and the business friendly tax policies of the state beckon one and all to come and invest in what is truly a Vibrant Gujarat.