Indian Jewelers Promoting Lower-Quality Gold JewelryJuly 07, 13
"We are moving to diamond jewelry more aggressively, introducing lower-carat jewelry and also pushing silver jewelry," said Gitanjali Gems Chairman and Managing Director Mehul Choksi in comments cited by The Indian Express.
Gold is traditionally a large element in Indian brides’ wedding gifts and dowries as well as religious rituals. However, increased gold imports have led to a soaring current account deficit.
Consequently, India has increased import duties on gold since May when a record 162 tonnes of gold were imported, and tightened credit for importers of gold.
A reduction in gold jewelry purchases due to higher prices, together with a falling rupee, are making life difficult for jewelers who have seen declining sales.
"Jewelers are thinking of introducing 14K jewelry,” said Haresh Soni, chairman of the All India Gems and Jewellery Trade Federation has more than 40,000 members. “Low-karat jewelry will help us to control imports as well."
Diamond jewelry uses 20-25 percent less gold compared to a normal 22K jewelry piece, said Choksi.
Demand for jewelry with lower-quality gold is seen coming mainly from younger consumers, who less concerned about jewelry purchases of 22K gold, according to the report.