India Jewellery Demand to Climb 10% In 2015

World’s second largest gold consumer India’s jewellery demand in the domestic market is expected to rise by 10 per cent to $32 billion in 2015 on the back of improving consumer sentiments, said ICRA.

In a report named ‘Indian Gold Jewellery Retail Industry’, the independent and professional investment information and credit rating agency said Indian demand for gold jewellery to rise 10 per cent in calendar year 2015 to $32 billion on the back of subdued pick up during 2014.

The demand has been stable since Q4 of CY13 and lower prices, easing regulations and improving consumer sentiment are likely to provide impetus in the coming months, it said.

The last quarter of CY2014 is likely to make up for the initial demand slump and the aggregate demand for the year is estimated at $29 billion, the report added.

Indian domestic gold jewellery in the retail segment had seen the demand at $31 billion in CY2013.

India, amongst the two largest consumers globally along with China, would witness sustained growth owing to cultural affinity, demographic diversity, rising disposable and preferred investment vehicle that are seen as the main growth drivers for the retail jewellery industry, it added.

However, sustained pressure on prices that resulted into postponement of purchases is one major concern of jewelers, as some also believe that any re—introduction of restrictive policies and plateauing of demand sentiment are other possible concerns over the near term.

The industry expects to record robust volume growth driven by improving industry sentiments amid easing regulatory norms and envisaged expansion plans by jewelers during the next 12 months, the report said.