Jewelry orders improved at this week’s Signature India International Jewellery Show (IIJS), following a government demonetization program that had frozen activity since November.
“The market is picking up, and things are starting to normalize,” said Sunil Mittal of Surat-based diamond jewelry wholesaler Shailja’s. “Buyers are coming in for the wedding season.”
Retailers have refrained from buying stock, as their sales plummeted when Prime Minister Narendra Modi announced a plan to abolish high currency notes on November 8. The program, which went into immediate effect, aimed to eliminate the high volume of fake currency being used for money laundering in the country.
Jewelers depleted their inventory after steady sales during the busy Diwali festival – which preceded the demonetization order – and in an initial rush by consumers to exchange now-obsolete currency with jewelry. But sales dipped afterward, and activity in the wholesale market went silent.
“For two to three months, there was no business, but activity started to pick up again in late January,” said Vishal Jain, a partner at Sensuel, which supplies couture jewelry to the local market. “Now retailers need stock as the wedding season continues until late April, and there are always festivals in India when people traditionally buy jewelry.”
Still, exhibitors at IIJS Signature estimated sales were down about 20 percent from this time last year. They expect it will still take another six months for the market – and liquidity – to return to its old levels. Consequently, wholesalers are discounting in order to move inventory, and there continues to be a shift in demand toward lower price points, Mittal observed.