HOW TO START A JEWELLERY BUSINESS IN INDIA?
The consumption of diamond and gold jewellery is immense in India making it one of the largest markets of jewellery in the world. India is one of the biggest importers of gold wherein the gems and jewellery sectors contribute around 6-7% of the country’s GDP. With the growth of its economy and an expanding middle class, the demand for gold is expected to rise in the coming years. Hence, the jewellery business becomes very promising for a business start-up. The article focuses on the jewellery business start-up in India.
WHAT ARE THE TYPES OF JEWELLERY BUSINESS?
The country’s domestic gems and jewellery business was valued at around Rs. 251,000 crores in the year 2013 and is expected to reach around Rs.500,000 crores by the year 2018. The sector is estimated to experience a Compounded Annual Growth (CAGR) of nearly 15.95% making it lucrative for investments.
The jewellery business in India can be categorised as follows:
- Retail shops
- Online retails
- Gold importers
- Gold trading
- Gold manufacturers
WHY START A RETAIL JEWELLERY SHOP IN INDIA?
India has a market of over 2.5 million jewellery shops, 450,000 goldsmiths and over a lakh of gold jewellers. Due to the popularity of retail shops in the country, consumers are seen to prefer local jewellers over the branded within which almost 96% are owned by local families making it an ideal and attractive sector to start a small business.
HOW TO REGISTER YOUR BUSINESS?
Jewellery business usually has a big turnover i.e. more than a crore because of which it is recommended to register under a Private Limited Company in order to enjoy the advantages of limited liability protection, ease of transfer etc. A major advantage of this is that it makes the fundraising easier in the form of either debt or equity.
Trading in gems and jewellery is taxable under VAT and hence, any jewellery business ought to obtain a VAT registration from the local sales department which is to be followed by filing of monthly or quarterly returns in order to avoid any penalties.
IMPORT EXPORT CODE (IE Code)
An IE Code is mandatory for importing goods into the country and a jeweller is expected to be aware about all the rules and regulation before importing any gold in India.
SALE OF HALLMARK JEWELLERY UNDER BIS LECENSE
Accurate and official determination of the proportion of precious metal content in the product or jewellery is done through Hallmarking. It is thus a standard official mark or guarantee of the purity of the precious metal in products/jewellery in a lot of countries. The Hallmarking scheme is intended to protect the consumer from low-quality and adulterated products, and to compel the manufacturers to maintain the proclaimed purity standards of fineness.
A jeweller is required to obtain a license from the Bureau of Indian Standards (BIS) if he/she wishes to sell hallmarked jewellery at a particular retail outlet. Every BIS license is provided for a single retail outlet and if a company has multiple outlets then it has to obtain multiple licenses to sell hallmark jewellery through various outlets.
After the license is granted by the bureau, a jeweller has to adhere to the terms and conditions mentioned in the agreement. A deviation from the agreement or non-compliance with the stated requirements or adulteration in the purity of precious metals (silver and/or gold) may lead to the cancellation of license and further penalties.
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