--By Suraksha Adhikari 

 

The domestic jewellery market has come a long way. Customer preferences are gradually shifting towards designer and branded jewellery rather than the classic designs that require more amount of gold. Classic jewellery designs were the market leaders until a few years back but these days people are seen more interested towards modern, semi-modern and antique items. “These days people prefer unique and light weight jewellery over heavy and classic designs,” said Mani Ratna Shakya, President of Federation of Nepal Gold and Silver Dealers’ Association (FENEGOSIDA).

 

Once a symbol of prestige and prosperity, the charm of jewellery has not decreased yet but it has been an integral part of our society. Though the trend of jewellery has changed, it still denotes affluence of a family. Shakya said, “The trend of placing orders has almost vanished as people now go for readymade products in the market.” For Nepalis, jewellery is a tradition. The way people flaunt jewellery has changed over the period, but the charm hasn’t changed and will never change, he added. 

 

The shift in consumer preferences is evident with the fact that the number of branded and designer jewellery stores in the Kathmandu valley has increased many folds over the last two-three years, changing the way Nepalis shop for jewelries.

 

Market Status

“The leading metal in Nepali society, gold covers 75 per cent of the Nepal market because of its traditional and religious importance,” said Tej Ratna Shakya, Former-President of FENEGOSIDA. Small amount of gold can be expanded to form large jewelleries and gold is an essential part in Hindu society during rituals ranging from birth and death of a person because of which the importance of gold has not decreased in our society.  “Though the sales volume of jewellery has come down because of the high price, the increase in the price of the yellow metal with various designs during the festival season has compensated the loss,” he said. 

 

The domestic market demands estimated 35-40 kg gold per day but the government ceiling of importing only 15 kg per day has hindered in meeting the demand. 

 

Shakya said, “The annual revenue from the jewellery to Nepali government reaches around Rs 3 billion excluding the insurance and other additional income.” He added, “Around 5,400 kg of gold is imported and one kg of gold yields Rs 5,20,000 revenue. The revenue from gold four years ago was Rs 70 million with a rate of Rs 13, 000 per kg.

 

“After gold, silver occupies second position in Nepali market covering 25 percent of total jewellery.” Shakya said. He added, “Diamond market has been gradually increasing in Nepal showing higher opportunities to the traders.”  Before 4-5 years the sale of diamond was not even 10 per cent of total jewellery trade, but now a days people prefer diamond jewelries to heavy and classic gold jewellery. Shakya explained, “Some years ago, diamond was only bought by upper higher class people but the trend of middle class people wearing diamond rather than yellow metal has made a significant improvement in recent years.” 

 

The growing market size has also prompted traders bring in branded jewellery and come up with their own brands. While Shree Riddhi Sidhi has launched two brands Ashwarya and Akabari, other prominent stores like Gem House has introduced Swarna and Arsi brand jewelleries.

 

The annual growth of the jewellery market is around 15-20 per cent at present but this growth is limited only up to this as the government has not revised its provision to import only 15 kg of gold per day while the demand of the gold is much more. 

 

Import-Export 

According to Tej Ratna Shakya, the government has permitted to import 15 kg gold on daily basis in Nepal. “The raw material for gold is imported up to that ceiling but readymade jewelries are imported less in comparison to the raw material as the ready-made jewelleries have to pay 10 per cent custom duty,” Shakya added. Only some of the big companies import the ready-made sets despite heavy custom charges, he said. 

 

Talking about the export, Shakya said that though the jewellery market has not been able to make remarkable change, it nonetheless is slowly spreading its outreach. Some of the jewellery companies have opened their outlets in foreign countries. “RB Diamond has opened its outlet in United States whereas Baraha Jewellery has its outlet in London and some have their outlet in Australia and so on,” he further added.

 

Apart from gold and silver, there is also high demand for Nepalis’ handcrafted jewelleries in the international market. “Most of the gems in Nepal are used for silver jewelleries that are exported to Europe and America,” said the traders. The handcrafted jewelries are very famous and liked by the Europeans and Americans. They are exported in different designs like earrings, rings, necklaces, pendants, bracelets, brooch, bangles and different articles embedded with precious stones.

 

“Diamond is the most important precious stone in terms of value that generates a larger volume of revenue and business internationally,” said Mahesh Man Shrestha, owner of Gahana Griha. Even in Nepal, diamond jewellery is more popular and in demand than other gemstones, added Shrestha.

 

Jewellery certification

Jewellery certification plays a vital role in the business. There are labs all over the world that identify and grade gemstones, however, it’s not an established trend in Nepal yet. Shakya said, “Since the jewelleries of Nepal are not exported to international market, the certification has not been an issue till now.” 

 

But the trend is being established slowly. He added, “RB Diamond Jewelers is taking an initiative to change this by introducing GIA (Gemological Institute of America) Certification for gems and jewelries in the near future.” These certificates are internationally recognized and honoured and known for grading precision, technology, research and other important factors.

 

Prospect of the market

The jewellery market of Nepal is providing employment opportunities to around 50,000- 60,000 people at present. Nepal’s jewellery market has a very bright future prospect. “The growth in the market can be noticed through the rise in the number of gold stores,” said Shakya adding that the profit margin of individual stores might have fluctuated, but the overall market is growing. The penetration of Nepali jewellery in Europe can develop the market in broader way with greater exposure. 

 

Problems and Challenges

There are many issues related to the jewellery market. Foremost is the lack of proper policies and regulations related to the production and other issues related to the market. Mani Ratna Shakya said, “The government inspects and charges our shops without any proper policies and we are still unaware about the framework of our working area as government has not prepared any regulations.”

 

Traders say the unavailability of raw material, lack of awareness among sellers and buyers, security risk and lack of skilled manpower have hindered the industry’s growth. 

 

Shakya said, “We can easily get a million dollar order from the US at present. Several American importers are interested in Nepali jewellery but we have not been able to export. Once we have the same export provisions as in India, the export of our jewellery will increase significantly. Therefore, the government should ease the export of jewellery.”

 

Over 80 percent of the skilled manpower working in Nepal come from India and other countries. “We are not being able to generate skilled manpower within the country and this might cause a huge problem in the days to come,” said Shakya adding that this can degrade the quality of the jewelleries.