The gold and diamond trade in the Middle East and India is expected to continue its double-digit growth in the coming years despite a price hike, said a senior industry official.
Vijay Jain, chief executive of the Mumbai-based Inter Gold, said the Middle East and India are the fastest growing diamond and gold jewellery markets in the world.
Jain displays a priceless 120.20 carat diamond during the exhibition. ©Gulf News
Rosy Blue, a $1.8 billion company, is the world's largest diamond trader. It established its Dubai operations at Dubai Airport Free Zone in 1999.
"Currently, India's jewellery demand is stabilising at around 800 tonnes, valued at $8 billion, per year. About 80 per cent of this is gold jewellery. The rest is split among diamond, semi and precious stones.
"Despite a price hike, consumption of gold is increasing. This is stimulating the recycling of old jewellery," said Jain on the sidelines of his company's first exhibition of diamond jewellery in Dubai.
"One of the reasons for the price hike is the strong position of the euro in the global money market. As the euro strengthens, the dollar weakens, and the value of gold also appreciates.
"The other reason is that the socio-economic scenario in India and the Gulf is fast changing. The buying capacity among many upper middle class consumers is increasing. Gold and diamond jewellery is more accessible to a widening upper-middle class segment who can afford both gold and diamond jewellery.
"In India, for example, a consumer can own diamond jewellery for Rs3,000 or about $75. This was not the case earlier. Diamond consumption recorded 22 per cent growth in India last year. It might record higher growth this year."
Jain said he would prefer gold to stabilise at between $385-$390 per ounce, which will be good for the producers, retailers as well as consumers. Demand could drop if prices rise further.
Inter Gold has tied up with Dubai-based Siroya Jewellers to launch its retail network.
"This is part of our larger plans to enter the Gulf's regional market. The Gulf is a strategic market for us and we expect to expand in the region very fast with our tie-up with Siroya Jewellers," said Jain.
"We are the largest jewellery exporters in India and our last year's exports were in excess of $100 million. Our network comprises 24 outlets in 15 cities in India. In three years, we plan to introduce 30 new stores."