Gitanjali, a top Indian group that has established jewellery and gem designing business on modern lines and made jewellery sets decorated with diamonds affordable for the middle class, has planned to invest in Pakistan.
To start its business here, the group will set up a franchise in Karachi, industry players say. It is encouraged by the opportunities that are expected to be created in the wake of ongoing efforts to normalise trade between India and Pakistan.
Gitanjali, along with other top Indian companies, expressed their interest in investing in Pakistan when a delegation of Pakistan’s gems and jewellery industry visited India recently.
Talking to The Express Tribune, All Pakistan Gems Merchants and Jewellers Association Chairman Saeed Mazhar Ali said many companies expressed interest in establishing their business and franchise in Pakistan and talks with Gitanjali had entered final stages. The jewellers were waiting for the grant of most favoured nation (MFN) status to India by Pakistan, which allows Indian investment in Pakistan, he said.
With increased collaboration, he said, India would transfer technology and expertise in gems and jewellery business, which would help Pakistan set up its industry on modern lines, focus on branding and marketing and hire skilled manpower.
Ali expressed the hope that the two countries could benefit from each other’s resources, experience and expertise. Many jewellery-making skills were vanishing in Pakistan and only a few artisans were left, who could make jewellery designs in Polki, Kundan, Kolkata, Jaipur and Rajisthan styles, he said.
To enhance its skills, Pakistan’s jewellery industry is planning to hire master trainers from India. Skilled workers of Pakistan will also be sent to India for training in a bid to shield the art from going into oblivion.
Though India is targeting Pakistan’s market, the local jewellery manufacturers have their own ambitions too. They are hoping to capture a large pie of the huge Indian market as both the sides have many common jewellery designs. Jewellery exports to India can reach $3 to $4 billion in a few years.
At present, Pakistan exports its jewellery to India through Dubai. South Asians in the US, Europe and the Middle East also purchase Pakistani jewellery.
With the help of India, vast mine reserves of gemstone in Pakistan can be used for value addition as Indian businesses have expertise in cutting and polishing precious stones.
Pakistan uses outdated technology in mining of gemstone and the crude techniques damage many high-value stones. The lack of modern facilities of cutting and polishing also deprive the country of potentially lucrative value addition.
All the eyes are on ongoing talks and expected roadmap to promote trade between the two countries.
Easy visa procedure
Mazhar Ali said as soon as Pakistan gave MFN status to India, Pakistan’s gems and jewellery products could capture a five-time bigger market. However, he pointed out that easy visa procedures and banking and communication facilities were critical.
He said Indian investors wanted work or long-stay visas instead of visit visas. Similarly, Pakistani artisans seek long-period visas to go to India for modern training.
Traders have also called for special tariff lines for the gems and jewellery industry, which include least or zero duty on finished products, raw material and machinery.
Prices of Pakistani jewellery are lower than Indian products because of lower value of Pakistani rupee than Indian currency.
Here, wages of skilled workers are less than their Indian counterparts due to difference in currency value. Many Indian companies are interested in taking advantage of the low production cost by investing in raw material and technology, which will also help Pakistan get latest technology and expertise.
Pakistan has an advantage in terms of freight charges. For gems and jewellery sent by India, $3,000 is paid as freight per container and the container arrives in 20 days. However, containers sent from Karachi can reach India in two days and the freight cost will be one-fifth.
The All Pakistan Gems and Jewellers Association has decided to organise a single-country exhibition of Pakistani jewellery in India and has sent proposals to the Ministry of Commerce and Trade Development Authority.
Though delegations of gems and jewellery manufacturers visit India, they are not allowed to sell jewellery there. Contrary to this, many Indian jewellers sold jewellery in a single-country exhibition held in the current year in Lahore.
Published in The Express Tribune, December 17th, 2012.