Artificial jewellery industry in India faces threat from China onslaught

KOLKATA: Costume jewellery manufacturers, who were doing well in the previous fiscal, are now on the brink.
Weak manufacturing coupled with cheap imports from China have put them in a spot, and to make matters worse, demand has dropped sharply by 10%-20% in the current financial year as customers don't want to spend.

Madhubhai Parekh, president, Imitation Jewellery Manufacturers' Association, said: “Survival of the industry is under threat. Liquidity continues to be a problem as extra money is being routed to the equity markets."

In FY14, the costume jewellery business grew 25%-30% as gold prices touched Rs 33,000 per 10 gm.Currently, the size of the costume jewellery market is Rs 8,000 - 9,000 crore, claim industry insiders.

There's a spurt in costume jewellery demand between October and February, coinciding with the wed ding season and festive demand, they said.

Mohan Iyer, of Mumbai-based Shruttika Marketing & Manufacturing Associates, however, thinks Indian manufacturers are not able to come up with innovative designs, leading to a dip in demand.He said Mumbai is fast losing its grip as the `hub' of fashion jewellery manufacturing as smaller centres like Jaipur, Rajkot, Gorakhpur are coming up.

Costume jewellery is largely made of brass, cast iron, nickel, plastic beads and stones instead of precious metals and gems. It does not have much resale value and prices range between Rs 100 and Rs 30,000. India, the second-largest manufacturer of costume jewellery after China, commands a huge demand in the US, Europe, Canada, Australia and many Asian countries.

Delhi-based Divya Sachdeva, owner of Teriot Fashion Jewellery, said demand has dropped by almost 20%-25% since October compared with the previous year. “It is a rough time for the costume jewellery business."