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India Jewellery Market

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Your Guide to The Jewellery Market In India

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Consumption of jewellery in India will get stronger

India is back to being number one in gold jewellery consumption by volume, still number one in diamond jewellery consumption by volume and number four in platinum jewellery consumption. The country will remain the most important market for precious jewellery in terms of potential for many years to come.

 For one, demand for precious jewellery is already formidable because of strong cultural traditions and yet 95 percent of adults in India possess wealth valued below US$10,000, according to Credit Suisse. With further economic growth, a large number of Indians will move to higher wealth bands and this will lead to an acceleration of precious jewellery consumption.

 The outlook for jewellery consumption in India cannot be clearer: Income growth for Indians will result in higher levels of jewellery consumption. Indeed, we believe the majority of Indians will likely have more money to spend on jewellery in the coming decades.

 However, what is less clear is the anticipated level of income growth. For instance, many people believe India is the next China in terms of economic growth potential. At Equity Communications, our view is that such beliefs are most optimistic based on our understanding of India's structural deficiencies and business culture problems. Our thinking is that India will stumble along at 4 to 7 percent annual GDP growth rate - but still good enough to move a large number of Indians out of poverty.

In terms of consumption potential, India's chief redeeming quality is its gigantic population of 1.26 billion people.

 The country is the poster child of 'sachet economies' whereby the majority of consumers in a country are accustomed to buying products and services in small, affordable portions rather than foregoing consumption of costly goods.

Therefore, we find that millions of Indians buy 22 karat gold rings in weights as little as 1.5 grams if that is what they afford at the moment of consumption. With this in mind, imagine what would happen to gold demand in India if incomes receive a massive boost.



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