THE INDIA GOLD AND JEWELLERY SUMMIT 2019, HELD IN DELHI IN NOVEMBER 2019, WAS RICH WITH PRESENTATIONS AND DISCUSSIONS WITH LEADING EXPERTS ON THE INDUSTRY’S MOST PRESSING PROBLEMS AND CHALLENGES
THE INDIA Gold and Jewellery Summit 2019 was full of intelligence and insights from all stakeholders – retailers, manufacturers, miners, refineries, analysts, ancillaries, designers, bankers, scientists, innovators and marketing gurus. The two-day summit was held on 22 and 23 November 2019 in Delhi. It began with a welcome panel consisting of Pramod Agrawal, Chairman, GJEPC (Gem and Jewellery Export Promotion Council); Rupa Dutta, Economic Advisor, Ministry of Commerce and Industry; Anup Wadhawan, Commerce Secretary; PR Somasundaram, Managing Director, India, World Gold Council (WGC); Ashok Seth, Northern Regional Chairman, GJEPC; K Srinivasan, Chairman, Gold Jewellery and Other Precious Metal Jewellery Panel, GJEPC; and Sabyasachi Ray, Executive Director, GJEPC.
Agrawal opened the summit by outlining its goals – ‘boosting exports, policy changes, and the hope that the government will work on the outcome of these discussions’. Dutta stressed that the government had and would continue to support the gems and jewellery industry with trade-friendly policies, and outlined the measures already taken.
GOLD INTELLIGENCE
Alistair Hewitt, Director, Market Intelligence, WGC, presented select findings on global gold buying patterns and attitudes from a survey of 18,000 people in India, China, the US, Germany, Canada and Russia. Confidence in gold as an investment was shown to be high across all age groups. However, the survey also revealed why people who haven’t bought gold haven’t done so (L-R) Shri Ashok Seth, Regional Chairman (Northern Region), GJEPC; Shri Rajesh Khosla, Chairman-Emeritus, MMTC-PAMP; Smt. Rupa Dutta, Economic Advisor, MoC&I (Ministry of Commerce & Industry); Shri Somasundaram PR, Managing Director, India, World Gold Council; Shri KV Tirumala, Deputy Director General of Foreign Trade, MoC&I; Shri Prakash Chandra Pincha, Regional Chairman (Eastern Region), GJEPC; Shri Shailesh Sangani, Trade Representative 10 ] January 2020 (a lack of trust in its purity or the retailers they’re buying from). Hewitt ended his presentation with the remark that there was a ‘huge untapped audience for gold, and that trust and education can be harnessed’ to reach out to this audience.
BUILDING TRUST TO RAISE DEMAND
In his presentation, HJS Pasricha, Deputy DG, Hallmarking, BIS (Bureau of Indian Standards), stressed that hallmarking was all about building trust through standardization in both bullion refineries and in jewellery. He also said that it was promising that there was growth in the number of jewellers registering to have their products hallmarked.
The panel discussion that followed was on demand and supply, and was moderated by Manisha Gupta, Editor, Commodities and Currencies, CNBC TV 18. Pasricha clarified that the jewellery that people had at home did not come under the scope of any hallmarking requirements unless it was to be sold. Jewellers would also be given time to exhaust their old stock before hallmarking became mandatory, he added.
Surendra Mehta, National Secretary, India Bullion and Jewellers Association (IBJA), threw light on demand: ‘Future demand this year will still be down by 15–20 per cent, but next year, we expect demand to be the same as in 2018.’ Surendra Pal Singh, Joint Secretary, Department of Economic Affairs, said that in the overall scenario, ‘India is a robust gold market with a good future.’
Chirag Sheth, Senior Research Consultant: South Asia and South- East Asia, Metals Focus, when asked about demand, said, ‘There is a large youth audience and there are lessons to be learnt from China in tapping this audience – they have employed product innovation to reach out to the young consumer.’
James Jose from the Cochin Refinery spoke about the need for making hallmarking mandatory, for digital hallmarking and for a gold spot exchange.
FINDINGS OF THE WGC GLOBAL SURVEY
75% of investors in India trust gold more than currencies. This number is lower in other countries, but always over 50% – gold is a deeply trusted investment.
67% of retail investors worldwide agree that gold is a good safeguard against inflation/currency fluctuations.
81% of fashion and lifestyle consumers worldwide agreed that gold is a good heirloom to pass on to family/children.
51% of retail investors worldwide feel that gold can bring them luck.
34% of 18 to 38-year-olds worldwide had invested in gold in the past year.
NEED FOR INDUSTRY UNIFICATION AND PRINCIPLES
WGC MD PR Somasundaram set the context for the upcoming discussions when he outlined the state of the gems and jewellery sector in India. Stressing on the need for industry to get together, he pointed out that of the 80-odd recommendations made in the ‘Transforming India’s Gold Market’ report by the NITI Aayog, not all require laws – many can be implemented simply by consensus within the industry. Stressing the lack of unification and transparency in the industry, he said, ‘There is a need for evidence-based policy – but there is no evidence for it yet.’
He had laid the ground for the next panel discussion on the India gold policy, which saw Dutta, Somasundaram himself, KV Tirumala, Deputy Director General of Foreign Trade, and Prakash Chandra Pincha, Chairman, Eastern Region, GJEPC, representing the trade. The discussion was moderated by Rajesh Khosla, Chairman Emeritus, MMTC-PAMP. Khosla set the agenda for the discussion: ‘We don’t produce gold, but we have gold. We’re supposed to be the largest above-ground gold mine in the world, with all the gold put away in households – about 25,000 tons. There have been attempts to utilize this through gold monetization schemes and other attempts… or should we use a heavy hand? That’s the dilemma for policy. For the industry, the need is to consider, within limitations, what is best for India and then to consider what is best for me.’
Dutta said that the DoEA was working on a comprehensive gold policy and had instituted schemes for gold monetization. ‘We import 800–900 tons a year, but to bring out the 25,000 tons, we need to build a comprehensive environment with hallmarking, assaying centres, etc. You will see some positive actions soon, but we also need more cooperation in practise,’ she said. On a more ‘user-friendly’ exim policy, Tirumala said, ‘For the exim policy 2020, we are looking for comments on where the shoe is pinching. The policy is not prescriptive anymore.’
When Somasundaram reiterated that the industry was not being able to represent to the government in a single voice, Pincha agreed and said, ‘There are black sheep in every trade. We need to introspect and come up with trade principles as a unified industry.’ The discussion ended on a note of more introspection and positive action by the trade before asking for policy measures from the government.
GOVERNMENT’S ASSURANCE
The last word of Day 1 came from Commerce Minister Piyush Goyal. Introducing the minister, GJEPC Chairman Pramod Agrawal called him ‘humble, dynamic and someone who makes quick decisions. He is democratic, listens to everybody, and has been very kind to the MSME sector. The industry is grateful and work has picked up after the measures announced earlier this year,’ referring to the GST exemptions. He also expressed gratitude to the ministry and the government for the mega shopping festival announced in four cities, plus the Common Facility Centres and the upgradation of artisans’ workshops across the country.
The minister energized the room when he began by citing the ‘glass half full or glass half empty’ approach – ‘India is the fifth largest exporter of gems and jewellery in the world. Why is it not the largest? Take it as a challenge,’ he told the packed hall. ‘The primary term associated with your sector is trust. There have been some bad eggs in the past, but I am confident the industry will get over that hump and regain the trust of stakeholders, bankers and customers.’
He touched upon the need for a bold and transparent mining policy from the states. ‘Defaulters damage the industry, making credit costlier, and that cost is borne by the entire industry, which affects jobs, sector growth and exports. I tell the GJEPC that the industry should take the lead in identifying and isolating the bad eggs,’ he said.
Retailers need to create a code of principles for the industry – a collective set of principles, not laws or rules
– PR Somasundaram, MD – India, World Gold Council
CREATING SUCCESSFUL BRANDS
The session of presentations and a panel discussion on building brands on Day 2 started with Anil Prabhakar, CEO, 4 AAy’s Consulting, setting the tone. Amit Chaloo, an advisor to international brands, spoke about how successful brands tell their own different stories in unique ways, which becomes an important part of establishing the brand. He also underscored the importance of taking risks in creating a successful brand.
Next up was Sachin Jain, MD, Forevermark, who spoke about connecting retail and technology with storytelling in promoting diamonds, and how they are using the digital space to reach the young customer. He emphasized that the millennial customer is both less brand-loyal and less category-loyal, and so retailers would have to use gamification and storytelling tools, like touchscreens, to reach out to new customers.
The panel discussion had Chaloo and Jain on the panel, besides Tawhid Abdullah, CEO, Jawhara Jewellery LLC, Dubai; Chandu Siroya, MD, Siroya Jewellers LLC, Dubai; Saurabh Gadgil, Chairman and MD, PNG Jewellers Pvt. Ltd.; Prof. Ruppal Walia Sharma, Professor – Marketing and Head, Delhi centre, SPJIMR; and Shaankar Sen, Vice Chairman, GJC (All India Gem & Jewellery Domestic Council). The discussion was moderated by Prabhakar. Prof. Sharma spoke about brand purpose, and how customers were looking for a deeper meaning in what brands stand for. ‘People buy you not for what you do but for why you do it,’ she said.
Gadgil spoke about a platinum men’s jewellery video that he has appeared in, saying, ‘If you believe in it, why not wear it? Platinum is cheaper than gold and has a lot of untapped potential.’
Siroya and Abdullah spoke about how Dubai became a collective brand for quality jewellery in response to a slump, when the trade came together to promote themselves as a destination. Sen spoke about a Retailers need to create a code of principles for the industry – a collective set of principles, not laws or rules – PR Somasundaram, MD – India, World Gold Council 12 ] January 2020 perception problem and unscrupulous practises in the trade, underscoring that it was for businesses to choose not to work with tainted associates, and that bodies like the GJC could only raise flags and work as whistleblowers.
India is the fifth largest exporter of gems and jewellery in the world. Why is it not the largest? Take it as a challenge
– Piyush Goyal, Minister of Commerce
FINANCE AND BULLION BANKING
The next panel discussion was on financing the gold jewellery sector and bullion banking. On the panel were PN Prasad, DMD, Precious Metal, SBI; Nirakar Chand, CEO, DIL; Harish Madaan, Head of Treasury, ICBC; Manish Padhye, Deputy GM, ICICI Bank; Vipin Raina, President-Marketing, MMTC-PAMP; and Sabyasachi Ray, Executive Director, GJEPC. The session was moderated by Manisha Gupta.
Prasad lauded the creation of MyKYCBank. On gold metal loans, he said that there was a need for a framework for bullion banking in India. ‘We need one single regulator (for bullion banking). Also, the products being offered are very primitive – a wider range of products is required,’ he said. Ray also mentioned that there were regulatory barriers to advancing such loans to the gems and jewellery sector. Chand made the point that gold or metal loans were better than cash loans because ‘a) they are a natural hedge against price rise, and b) the cost of financing is much lower than rupee cost of financing. We have to encourage such loans. Unfortunately, the RBI stance on metal loans has been very restrictive.’ Padhye also agreed by saying, ‘Bullion banking is the need of the hour, but more innovation is required in it.’
Raina stressed that ‘the market has to open up. We cannot sit in a corner and have no say. There has to be a level playing field – the regulators have to be more openminded.’ The session ended with a consensus that there was a need for a streamlined regulatory mechanism and more innovation in products for bullion banking to come into its own.
INNOVATION AND TECHNOLOGY
The last panel discussion of the summit was on innovation and technology. On the panel were Tanmay Shah, Innovations, Imaginarium; David Bertazzo of SISMA, Italy; Prof. Smrutiranjan Parida from IIT Bombay; and Alparslan Misir of Alpress Design Moulding and Consulting, Turkey. The discussion was moderated by Shimul Vyas, Principal Designer, National Institute of Design (NID).
Tanmay set the tone by underscoring that technology can be used to put the customer first, rather than last, in the process of creating a piece of jewellery. ‘The consumer, the designer, the manufacturer and the retailer are the four stakeholders in the creation of jewellery. In the old structure, the consumer came last, when the piece had already been made. Today, however, consumers are emphatically telling you their demands before the piece has been created. They don’t care about what it’s made of or how unique the process is. They want exclusivity, and hence we need unique platforms for storytelling,’ he said. He spoke about virtual catalogues and technology like 3D printing giving forms to designs that were not possible earlier.
David Bertazzo of SISMA, Italy, explained how Italy is now driving innovation in modern methods of jewellery manufacturing. ‘We introduced lasers to the industry, and the last development we have been responsible for is additives. Now, it’s important to develop newer technology.’ Alparslan Misir of Alpress Design Moulding and Consulting, Turkey, spoke about their work in moulds, lasers and fusion technology – casting, stamping, laser and hollow.
Metallurgy expert Prof. Smrutiranjan Parida spoke about the role metallurgy and inventions like nano gold can play in creating the jewellery of the future. He also presented the possibilities of metal alloys and metal recycling.