Domestic gold demand has witnessed a 30 per cent dip in volume terms during the third and fourth quarters of the current fiscal compared with same period last year.
According to Mr Bachhraj Bamalwa, Chairman, All India Gems and Jewellery Trade Federation, the drop in demand is on account of the rising prices of the yellow metal.
“The domestic demand had witnessed 10 per cent growth in the first and second quarters of this year. However, there has been 30-35 per cent shrinkage in demand in the third quarter. The fourth quarter is also not looking too bright so far,” Mr Bamalwa said at a press meet here on Tuesday.
According to the World Gold Council estimates, India's annual consumption of gold stands at 746 tonnes.
Given the present trend, the domestic gold demand is likely to be flat or post a marginal growth this year. “Though in volume terms there has been a sharp dip, however, in value terms we could clock a ten per cent growth this year,” Mr Bamalwa pointed out.
Exports
Export of gem and jewellery – which has grown by 10-12 per cent in value terms – has witnessed 20 per cent dip in volume terms so far this year.
India's gem and jewellery exports stood at $43.14 billion in 2010-11.
“The value growth is aided by the rise in gold prices which has gone up by about 35 per cent over the last couple of months. However, in volume terms the growth has witnessed a dip due to drop in demand in Europe and US markets,” Mr Bamalwa said.
The industry is anticipating 10 per cent growth in exports to $47-48 billion in 2011-12.
Diamonds account for almost 65 per cent of the total exports while gold jewellery contributes 30 per cent. Precious stones account for just about five per cent of the total exports, Mr Bamalwa said.