Gems and Jewellery Business in India; Business Idea of the Month: Imitation Jewellery

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Insight
Biz India News 2
Biz Policy Updates 3
The Indian Gems & Jewellery Industry 4
Business Idea of the Month 8
Upcoming Business Summit 9
Contact us 10
eBizWire
Vol. II Issue. I, April 2013
Industry of the Month
“The Gems & Jewellery
Industry”

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Sweden based Rusta to set up its retail operations in India
The furniture and leisure products manufacturer which has been sourcing finished
products from India for the last one decade plans to set up its retail operations in the
country. Once all the investment is made, India will rank as the company’s second
biggest market for sourcing after China.
Delta faucet opens up in India
America’s top brand for faucets, the Delta Faucet Company opened up its outlet
called “Dream Kitchens” in Hyderabad, the first in India. It shall display a slew of
faucets and related products for the kitchen space. After this flagship store, the
Company plans to set up 20 more stores by the year end.
MNCs choose India for Information Technology Units
Zinov, one of the leading management consulting companies globally has estimated
that in the next few years, almost 50% of the Fortune 500 Companies will have their
captive centers in India working on business processes, technology and other
matters. What contributes to India being a preferred location is the fact that almost
200 wholly owned IT and ITes centers of MNCs are already operating in India.
India – one of the best cement markets in Asia
Holcim, the Switzerland based cement major that operates in India through ACC and
Ambuja Cements considers India as one of the best cement markets in Asia, which is
planning to expand its production capacity in the Country. It has been the said that
the prospects for cement companies are high owing to demand for infrastructure
expansion projects and need for low-cost housing.
India emerges as an export hub for SUVs
Global automobile majors plan to leverage on India’s cost competitive manufacturing
practices. Demand for sedans and utility vehicles is increasing in the country and the
auto-makers plan to make use of the excess capacity by exporting the SUVs to
developed markets like Europe, Japan, Latin America and Australia
India has the best production units in the World – Car Manufacturers
Multinational Automotive plants in India are among the top in the world in terms of
productivity and quality. Top Companies like Hyundai, Toyota and Suzuki usually
rank their Indian manufacturing facilities on top as opposed to production centers in
the rest of the world.
Sweden based Rusta to set up its
retail operations in India
Delta faucet opens up in India
MNCs choose India for Information
Technology Units
India – one of the best cement
markets in Asia
India emerges as an export hub for
SUVs
India has the best production units
in the World – Car Manufacturers
HeadlinesBiz India News

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Biz Policy Updates
FDI Policy April 2013New FDI Policy, April 2013
The Department of Industrial Policy and Promotion, Government of India (DIPP)
notified the new consolidated policy on Foreign Direct Investment (FDI) on 5th
April, 2013. Barring a few changes, this policy is more of a compilation of circulars
issued by Reserve Bank of India in the past one year. The major changes
introduced through this policy are as follows:
1. Foreign Direct Investment (FDI) in Limited Liability Partnership (LLP)
The Indian Companies with FDI are allowed to convert into LLPs subject to
the FIPB/ Government approval based on a certain conditions. In this respect,
the condition regarding foreign capital participation only by way of cash
received through inward remittance/ debit to NRE/ FCNR account maintained
with an AD bank, has been dispensed with.
2. Conversion of ECB/ Lump Sum Fee/ Royalty, etc. into Equity
The companies are allowed to issue equity shares against the import of
capital goods/ machinery/ equipment (excluding second-hand machinery),
subject to compliance with the various conditions specified in the FDI Policy.
In this regard, the requirement of independent valuation by a third party of the
above items imported, along with production of copies of documents issued
by the custom authorities towards assessment of the fair value of such
imports has been dispensed with.
3. Transfer of shares/ convertible debentures from Resident to Non
Resident
In the context of transfer of shares between a resident and non-resident, the
ambit of the term ‘Person Resident outside India’ now includes incorporated
non-resident entity, foreign national, NRI, FII other than the erstwhile OCB.
4. Foreign Investment in Asset Reconstruction Companies
The overall investment limit for investment in ARCs has been increased to
74% from 49% under the Government Route. The increased limit is overall
limit for both investment by way of FDI & FII. Earlier Person residents outside
India were not allowed to invest in ARCs through FII mode. Some
amendments to the conditions for investment in ARCs have also been made.
Amendments through different notifications, circulars, and press notes
during the period i.e. from 10.04.2012 to 05.04.2013 have been
incorporated in the new consolidated FDI policy
Legal Headlines

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Think – traditional Indian woman. It is unlikely that you will miss out on the
elaborate jewellery she adorns in her picture in your mind. Jewellery has been a
part and parcel of a woman’s life in India. Centuries have come and gone but
jewellery, especially gold and silver, have very permanently become a part of
India’s culture – little girls seeing their grandmother’s jewellery with their twinkling
eyes, dreaming to wear it once they have gracefully transitioned into grown up
ladies. No wonder, the Gems and Jewellery Industry in India is one that is very
important for the country, not only for its culture but also for its economy.
The Indian Gems and Jewellery Industry is one of the fastest growing industries in
India which contributes to earning an appreciable amount of foreign exchange for
the country’s treasury every year. The industry covers a wide range of activities
within its periphery, from procuring raw material from other countries, the talented
artisans and craftsmen of India transforming them into adorable and beautiful
handcrafted pieces to selling the items not only within the country but exporting
them to bigger markets abroad as well.
India- a rich land, quite literally
India is a land rich in gemstones and precious metals with significant reserves of
gold, diamonds, rubies, emeralds, sapphires and other precious and semi-precious
stones. As per the Geological Survey of India, India houses almost 9% of the
global gold deposits with most of it concentrated in the Deccan part. Some major
states with reserves of precious stones can be seen below:
STATE KNOWN FOR
Jammu & Kashmir Blue Sapphires
Orissa Considered the Brazil of India, has a host of
gemstones like rubies and other gemstones like
garnet, aquamarine, etc.
Madhya Pradesh The most important diamond producing centre in
India
Chattisgarh Diamonds
Rajasthan Emeralds, aquamarines & other gemstones
Andhra Pradesh Gold, diamonds, cat’s eye, rubies
Karnataka Diamonds & Rubies
Tamil Nadu A host of gemstones including sapphires, rubies,
alexandrite, etc.
Gems & Jewellery Industry in India

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Gems & Jewellery Industry in India
The Gems & Jewellery Market
With 80% of the share in the market, gold rules the roost in India while the
remaining market share is taken by other jewellery including diamond studded and
other gemstones studded jewellery. This portion also includes the demand for
platinum which on the face of it seems like very less demanded metal. But compare
it to the fact that the platinum’s demand in the World is driven by India and China,
and the figure starts to look bigger.
Where the size of the Indian Gems & Jewellery Market was USD 30.1 Billion in
2011, it is expected to become USD 45 Billion by 2015.
Why Invest in the Indian Gems & Jewellery Industry?
India offers an attractive investment and business opportunity for big players
interested in establishing a strong foothold in the Country. This can be attributed to
various factors like the Country’s growing domestic market and especially the
growing middle class, the export advantage existing in the industry because of
The Indian Gems
& Jewellery
Industry
Gold
Rich Cultural
Heritage
Shine
Malleability
Ductility
Diamonds
Increase in
urbanization
Increase in
disposable
Income
"Diamonds are
forever"
Colored
Gemstones
Cheaper
alternative
Color
Coordination
with attire
Religious
association of a
color
Some Interesting Facts! *
*Taken from various sources
India is the world’s largest
consumer & importer of Gold
India is the largest cutting &
polishing industry for
diamonds in the World
The Indian Gems & jewellery
Industry employs about 3.4
million people
India is one of the first
countries to introduce
Diamonds to the world
India accounts for more than
20% of the World’s total gold
consumption
India exports 95% of the
World’s diamonds (Includes
diamonds imported for
cutting and polishing)

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renowned Indian craftsmanship and the FDI Policy and a host of other initiatives
undertaken by the Government of India. Not only this, various factors like low cost
of production and skilled but low cost craftsmanship, help maintain a healthy
competition in the Industry.
The main foreign markets for the industry are Europe, USA, UAE and Hong Kong.
Some of the newer markets which are being focused on by the industry players are
the Latin America, Russia and Africa.
Government Support for the Indian Gems and Jewellery Industry:
The Indian Government has taken various initiatives to help in the further
development of the industry. These can be noted as:
1. The FDI Policy:
a. 100 % FDI in the industry through automatic route in the gems
and jewellery sector
b. 74% FDI under automatic route for exploration and mining of
diamonds and precious stones.
c. 100% under the automatic route for exploration and mining of
gold and silver and minerals other than diamonds and precious
stones, metallurgy and processing
2. The Foreign Trade Policy;
a. Duty Free Import Entitlement of consumables, tools and
additional items allowed to extents as specified
b. Duty Free Import Entitlement of commercial samples up to INR
3,00,000
c. Personal Carriage of Gems and Jewellery up to USD 5 Million
allowed for holding/ participating in overseas exhibitions
d. Designated Diamond Dollar Accounts for businesses with a track
record of import/ export of gems and jewellery and an annual
turnover of INR 3,00,00,000
e. An Export Oriented Unit (EOU) in the Gems and Jewellery Sector
shall be permitted to:
i. Export for holding/ participating in exhibitions abroad
ii. Personal Carriage of gold/ silver/ platinum jewellery,
precious & semi-precious stones, beads & articles
iii. Display/ sell in permitted shops set up abroad
iv. Set up showrooms/ retail outlets at International Airports
Gems & Jewellery Industry in India

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Starting your own venture in the Industry:
Clearly, for the kind of benefits and the environment offered by the Company to the
Gems & Jewellery Industry in India, doing business in this industry can prove to be
very lucrative if done in the right manner. Whether it’s a designer boutique
showcasing a line of jewellery you designed or a retailing outlet for jewellery items
you purchased from a supplier on wholesale basis.
Steps to start a jewellery business:
1. Registering your business: You could choose to set up your business
as a proprietorship, a partnership firm or a company. Check the availability
of the name you prefer and register your business.
2. Get registered with Tax Authorities: Obtain the basic numbers from tax
authorities like the PAN, TAN, TIN and the Service Tax Number so that
you are able to pay all the necessary taxes.
3. Open a Bank Account: Businesses need to open current accounts with
owing to large number of transactions in a day. Having a separate bank
account will keep things streamlined.
4. Choose a location: Choose where you want to set up the business.
Depending on the alternatives available to you, you could lease, rent or
purchase a building.
5. Find a supplier: If you are not designing your own jewellery items, you
would want to locate a supplier who will be able to supply good quality
items at cheaper prices to you, something which will bring you more
profits.
6. Get your stocks insured: As the inventory involved in this business is
very expensive, it only makes sense to insure your stocks against theft
and other mishaps.
7. Advertising: You would want to make sure you weigh all the advertising
alternatives so that your business and products get ample attention from
prospective customers
8. Go Online: Businesses that know how to leverage on the contemporary
techniques go farther as opposed to their counterparts. Making yourself
available online will go a long way in helping you expand your customer
base.
Starting your own jewellery business
Register your
business
Register with
Tax Authorities
Open a bank
account
Choose a
location
Find a Supplier
Get your stocks
insured
Advertise
Go Online
Gems & Jewellery Industry in India

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Some important licenses that one should be on a look out for:
1. License by Bureau of Indian Standards (BIS) for use of Standard Mark on
the jewellery. (A separate Corporate Hallmarking License is required if
operating multi-chain outlets)
2. Registration with BIS recognized Assaying and Hallmarking Centers
3. Certification and grading of cut and polished diamonds of 0.25 Carat and
above from authorized laboratories as per the Foreign Trade Policy
4. Import Export Code
5. Registration Cum Membership Certificate from the Gem and Jewellery
Export Promotion Council (GJEPC)
6. Approval of the GJEPC for exporting gold/ silver/ platinum jewellery for
exhibitions abroad or export of branded jewellery for display and sale in
permitted shops set up abroad
7. Kimberly certificate from GJEPC for foreign trade of rough diamonds
The Indian Gems & Jewellery Industry is one of the most competitive in the
world and shall continue to remain so as long as people continue to focus on
their appearances, trends and fashion. As changing of such a scenario is
highly unlikely, it will be safe to assume that business activities in the Gems
and Jewellery sector in India will only be on a rise.
Major Statures and provisions
applicable to a Jewellery Business:
 The Companies Act, 1956 or the
Partnership Act, 1932 or the Limited
Liability Partnership Act, 2008 as
applicable
 The State Shops and Establishment
Act
 Service Tax, The Finance Act
 The State Value Added Tax Act
 The Income Tax Act, 1961
 The Foreign Trade Policy 2009-2014
Gems & Jewellery Industry in India
BUSINESS IDEA!! – Imitation Jewellery
There are no doubts that the Jewellery Industry is booming - thanks to
the domestic sales and exports. But at the same time, a lot of people are
looking for cheaper alternatives to precious jewellery, something that can
be worn every day.
This is a gap which will never get filled completely no matter how
narrower it gets. Start your own business dedicated to selling imitation
jewellery which can be afforded by the college kids and office goers
alike. Set a standalone shop, start a multi-outlet chain, go online,
negotiate with kiosks at the metro stations, set kiosks at shopping malls-
the options are as many as you can imagine!

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 The Great India Startup Business Development Conference &
Show, Bengaluru
A Convention organized by MARCONIX, it is aimed at bringing together
people to unlock greatest business opportunities that exist in the current
business scenario. The event will see people exploring new business ideas,
secure funding and build teams in an expedition against giant businesses.
Date: 20 April, 2013
Venue: Bengaluru, Country Club, Sarjapur Outer Ring Road
 Entrepreneur Extraordinaire, Mumbai
An event that aims to bring together existing & aspiring businessmen and
investors to share their ideas, thoughts & experiences, this gathering of
people is going to be an enormous networking opportunity. 5 entrepreneurs
will get to showcase their ideas and attract a willing investor to kick-start
their venture.
Date: 26 April, 2013
Venue: Mumbai, Sofitel Mumbai, Bandra Kurla Complex
 International Fashion Jewellery & Handicraft Expo
The Four-day mega event dedicated to the Fashion jewellery, handicraft and
accessories industry, will present an opportunity to national / international
buyers to source their requirements from all over India under one roof.
Date: 26 - 29 April, 2013
Venue: NSIC Exhibition Ground, Okhla Industrial Estate, Delhi
• The Great India Startup Business
Development Conference &
Show
• Entrepreneur Extraordinaire
• International Fashion Jewellery
& Handicraft Expo
Upcoming Business Summit

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Disclaimer:
This paper is a copyright of Corporate Professionals (India) Private Limited. The entire content of this
paper have been developed for the new startups. The author and the Company expressly disclaim all
and any liability to any person who has read this paper, or otherwise, in respect of anything, and of
consequences of anything done, or omitted to be done by any such person in reliance upon the
contents of this paper.
Nitesh Latwal
E: nitesh@indiacp.com
D: +91.11.40622249
M: +91 9873521481
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Ritika Kharbanda
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