A Project

ON

“GEMS AND JEWELLARY”

Submitted to

Prof. Harikrishna Chaurasia

In partial fulfillment of the requirement of the award for the degree
of Masters of Business Administration
GLS University
Submitted by:

1. ASHFAK HAMDANI(201900620010453)
2. NIDHI JOSHI (201900620010462)
3. KHUSHBOO SHAH (201900620010582)
4. YASH THAKKAR (201900620010621)
5. YASH MAJETHIYA (201900620010483)
6. DHAVAL RAVAL (201900620010560)
 INTRODUCTION TO THE STUDY

The Indian Gems and Jewellery (G&J) sector is one of the largest in the world, contributing
around 29 per cent to the global jewellery consumption. The sector employs over 4.64
million employees and is home to over 300,000 gems and jewellery players. The sector
contributes 7 per cent to the Gross Domestic Product (GDP) of the country. India’s exports
of cut and polished diamonds, gold jewellery and gem stones are forecasted to grow around
10 per cent year-on-year in FY19 according to Gems and Jewellery Export Promotion Council
(GJEPC).

Indians have always been connoisseurs of precious stones and ornaments. Trade secrets of
the jewellery business have been handed down over generations, ensuring continuity of
traditional craft. India is the most preferred country in terms of gems and jewellery export.
The facts listed below give us an idea of India’s position on the global gems and jewellery
export map. Indian gems and jewellery are exported across continents.

Ornaments have been a part of civilizations in India since ages. Jewellery has been an
integral part of the Indian culture as they were in demand and in fashion since ancient
civilization of Harappa and Mohenjo-Daro. As a well-known fact, jewellery can be adorned
to highlight almost any part of the body. Gems and jewellery have been important part for
both aesthetic as well as investment purposes. Masses in India have great fascination for
gems and jewellery to the extent that it plays a significant role in the Indian economy. The
industry is much fascinating being traditionally glamorous and artistically modern.

As an important sector of Indian economy, Gems and Jewellery is a leading foreign exchange
earner for the country. Export of gems and jewellery has been among the fastest growing
sectors in India in recent years. It has gained global popularity because of its talented
craftsmen, its superior practices in cutting and polishing fine diamonds and its cost
efficiencies. The gems and jewellery sector occupies a prominent place in the Indian
economy in terms of export earnings, employment generation, and growth. India has
contributed about 80%of the global market in this sector in terms of carat. This leads to
employing over 90% of the global diamond industry workforce, the country also accounts
For about 90%of the volume of diamonds processed in the world. According to the recent
reports, eleven out of twelve diamond stones set in jewellery are cut and polished in India in
this processing is done on rough diamonds in a complete range of sizes and qualities,
including the stones larger than ten carats.
 India is the world’s second largest gold consumer.
 India’s top export destinations for gems and jewellery are U.S, Europe, Japan and China.
US account for nearly one-fourth of the country's total gems and jewellery exports.
 Net Gems and Jewellery exports from India for 2017-18 stood at US$ 40.98 billion,
whereas in April-July 2018 the exports were valued at US$ 10.64 billion.
 Exports of cut and polished diamonds grew by 4.17 per cent to $23.74 billion in 2017-18.
During April-October 2018, polished diamond exports grew by 8.37 per cent year-on-year
to US$ 14.99 billion.
 Gold jewellery shipments went up about 11 per cent to $9.67 billion in 2017-18.
 REASON TO GO FOR INTERNATIONAL BUSINESS

The jewellery industry seems poised for a glittering future. Annual global sales of €148
billion are expected to grow at a healthy clip of 5 to 6 present each year, totaling €250
billion by 2020. Consumer appetite for jewellery, which was dampened by the global
recession, now appears more voracious than ever.

But the industry is as dynamic as it is fast growing. Consequential changes are under way,
both in consumer behaviour as well as in the industry itself. Jewellery players can’t simply
do business as usual and expect to thrive; they must be alert and responsive to important
trends and developments or else risk being left behind by more agile competitors.

To chart the most likely course of the jewellery sector, we analyzed publicly available data,
studied companies’ annual reports, and interviewed 20 executives at global fine-jewellery
and fashion-jewellery companies and industry associations. Our research indicates that five
trends that shaped an adjacent industry—apparel—over the past 30 years are becoming
evident in the jewellery industry as well, and at a much faster pace: internationalization and
consolidation, the growth of branded products, a reconfigured channel landscape, “hybrid”
consumption, and fast fashion. In this article, we discuss how these trends could affect the
future of jewellery and what jewellery companies should do to prepare.

Branded items already account for 60 percent of sales in the watch market. While branded
jewellery accounts for only 20 percent of the overall jewellery market today, its share has
doubled since 2003 (Exhibit 1). All executives we interviewed believe branded jewellery will
claim a higher share of the market by 2020, but their views differ on how quickly this shift
will occur. Most expect that the branded segment will account for 30 to 40 percent of the
market in 2020.
INDIA’s diversification in design and craft attract foreign customers. The jewellery of
Kashmir is famous for its design and very minutely worked. Tradition mix with modern
methods plays vital role in sales. Jaipur is the best cheapest city to buy gold jewellery in India.
Karnataka has an estimated 17 to 18 tonnes of gold reserves and the state is the major gold
producer state in India. 88.7% of total gold production in India. Ramagiri in Anantapur
district is the most important gold field in AP.
 APPROCHES USED TO GO FOR INTERNATIONAL BUSINESS

There are 4 types of approaches to go for international business: -

Company Export the same products as it

Ethnocentric designed and developed in domestic market.
But the excessive production give change to
Approach company to expend new market in globe

Polycentric Company realize that foreign country need

different approach and then company establish a
Approach foreign subsidiary company.

Regio-centric Company start doing marketing or production

according to the foreign country demand or
Approach requirements.

Company Start manufacturing products as exclusively

Geocentric as per the demand of foreign country and use
Approach resources also of operating nations. Like HRM, Raw
material and other resources

From the above four approaches, when we start our diamond business we adopt
Ethnocentric business approach. Because in the starting of the business we firstly introduce
our products to the customers and when people have trust on our products, like our
diamonds products and recognize the brand name then after we think to establish our
subsidiary branch to other country, so firstly we have adopt ethnocentric approach and
after in future our diamond business we can expand. In Ethnocentric approach we cover
these things: -
Decisions are made in Head quarter.
Home Standard is applied on all products.
Focus on Domestic Objective.
Identification with owner nationality.
High Position by home country’s Managers.
 DOMESTIC MARKET OF THE PRODUCT

Introduction:

The Gems and Jewellery sector plays a significant role in the Indian economy, contributing
around 7 per cent of the country’s GDP and 15 per cent to India’s total merchandise exports.
It also employs over 4.64 million workers and is expected to employ 8.23 million by 2022.
One of the fastest growing sectors, it is extremely export oriented and labour intensive.
Based on its potential for growth and value addition, the Government of India has declared
the Gems and Jewellery sector as a focus area for export promotion. The Government has
recently undertaken various measures to promote investments and to upgrade technology
and skills to promote ‘Brand India’ in the international market.
India is deemed to be the hub of the global jewellery market because of its low costs and
availability of high-skilled labour. India is the world’s largest cutting and polishing center for
diamonds, with the cutting and polishing industry being well supported by government
policies. Moreover, India exports 75 per cent of the world’s polished diamonds, as per
statistics from the Gems and Jewellery Export promotion Council (GJEPC). India's Gems and
Jewellery sector has been contributing in a big way to the country's foreign exchange
earnings (FEEs). The Government of India has viewed the sector as a thrust area for export
promotion. The Indian government presently allows 100 per cent Foreign Direct Investment
(FDI) in the sector through the automatic route.

Gold demand in India rose to 760.40 tonnes between January to December 2018. India's
gems and jewellery exports stood at US$ 4.99 billion between Apr 2019 –May 2019*. During
the same period, exports of cut and polished diamonds stood at US$ 3.52 billion, thereby
contributing about 76.96 per cent of the total gems and jewellery exports in value
Terms. Exports of gold coins and medallions stood at US$ 686.51 million and silver jewellery
exports stood at US$ 765.98 million in between April 2018 - March 2019.

The gems and jewellery market in India is home to more than 300,000 players, with the
majority being small players. Its market size is about US$ 75 billion as of 2017 and is
expected to reach US$ 100 billion by 2025. It contributes 29 per cent to the global jewellery
consumption.

India is one of the largest exporters of gems and jewellery and the industry is considered to
play a vital role in the Indian economy as it contributes a major chunk to the total foreign
Reserves of the country. The Goods and Services Tax (GST) and monsoon will steer India’s
Gold demand going forward.

The Gems and Jewellery sector is witnessing changes in consumer preferences due to
adoption of western lifestyle. Consumers are demanding new designs and varieties in
jewellery, and branded jewelers are able to fulfil their changing demands better than the
local unorganized players. Moreover, increase in per capita income has led to an increase in
sales of jewellery, as jewellery is a status symbol in India.
The cumulative Foreign Direct Investment (FDI) inflows in diamond and gold ornaments in
the period April 2000 – March 2019 were US$ 1.16 billion, according to Department for
Promotion of Industry and Internal Trade (DPIIT).

Some of the key investments in this industry are listed below.

 Deals worth Rs 8,000 crore (US$ 1.19 billion) were made at the Indian International
Jewellery Show held in August 2018.
 Companies such as PC Jewellers, PNG Jewellers, Popley and Sons, are planning to
introduce a virtual-reality (VR) experience for their customers. The customer will have to
wear a VR headset, through which they can select any jewellery, see the jewellery from
different angles and zoom on it to view intricate designs.
 The Bureau of Indian Standards (BIS) has revised the standard on gold hallmarking in
India from January 2018. The gold jewellery hallmark will now carry a BIS mark, purity in
carat and fitness as well as the unit’s identification and the jeweller’s identification mark.
The move is aimed at ensuring a quality check on gold jewellery.
 The Gems and Jewellery Export Promotion Council (GJEPC) signed a Memorandum of
Understanding (MoU) with Maharashtra Industrial Development Corporation (MIDC) to
build India’s largest jewellery park in at Ghansoli in Navi-Mumbai on a 25 acres land with
about more than 5000 jewellery units of various sizes ranging from 500-10,000 square
feet. The overall investment of Rs 13,500 crore (US$ 2.09 billion).
 Gold Monetisation Scheme enables individuals, trusts and mutual funds to deposit gold
with banks and earn interest on the same in return.
 MAJOR IMPORTING COUNTRIES OF GEMS AND JEWELLARY

1. Switzerland
For the fourth year out of the past five, Switzerland -- accounting for 24.4% of the world's
imports -- emerged as the global leader. But don't be fooled: The country also ranked first in
gold exports for the fifth consecutive year, proving it's truly the global hub for the gold
industry. In fact, four out of the world's five largest gold refineries are located in
Switzerland. For example, Valcambi SA, a leading Swiss refiner owned by Newmont Mining
Corp., has an annual refining capacity of about 1,400 metric tons.
To further illustrate Switzerland's vital role in the gold industry, consider the following:
According to the U.S. Geological Survey, approximately 3,100 tons of gold were produced in
2016; Switzerland imported 2,716 tons, or 88%.

2. China
Importing $64 billion in gold last year, China fell from the top spot it held in 2015. Eager to
fill up its coffers, however, China held on to the yellow stuff and only exported $1.2 billion in
gold. As a result, the nation -- $62.7 billion richer in gold at the end of 2016 -- ranked the
highest in terms of gold trade balance. For some context, the U.K. and China earned second
and third place, with trade balances of $42.2 billion and $18.6 billion, respectively.
Gold bar and coin demand rose for the third consecutive year; consequently, China's
demand for bullion is now above its five-year average, according to the World Gold Council.
For the balance of 2017, there's speculation that the country's hunger for the metal will
remain strong. In June, Bloomberg reported that "Demand is rising on concerns over
property, share, and bond markets and the outlook for the yuan, amid a government drive
to reduce leverage in the financial system."

3. United Kingdom
Although there was a 3% year-over-year drop in its jewellery market, the U.K. climbed its
way back into the top five after falling to sixth place in 2015.
The Brexit vote surely affected the renewed and greatly increased appetite for the yellow
metal. Whereas it averaged gold imports of $14.9 billion from 2012 through 2015, the U.K.
imported nearly four times as much in 2016 -- approximately $58 billion.
Looking ahead, the U.K.'s imports in 2017 may very well can be comparable to last year as
the uncertainty regarding Brexit still looms. For example, the start of 2017 illustrated
investors' interest in turning to gold bullion. According to the World Gold Council, in Q1
2017 the U.K.'s gold bar and coin market hit its highest level since Q2 2013.
 INDIA’S COMPETITORS

Global sales for jewellery exports by country totaled US$103.2 billion in 2018.

Overall, the value of jewellery exports dropped by an average -28.3% for all exporting
countries since 2014 when jewellery shipments were valued at $144 billion. Year over year,
the value of exported jewellery slowed by -2.6% from 2017 to 2018.

Among continents, Asian countries sold the highest dollar worth of jewellery exports during
2018 with shipments valued at $58.8 billion or 57% of the worldwide total. In second place
were European exporters at 31.5% while 10.3% of international jewellery shipments
originated from North America. Smaller percentages came from Latin America (0.5%)
excluding Mexico plus the Caribbean; Oceania (0.4%) led by Australia and Africa (0.3%).

For research purposes, the 4-digit Harmonized Tariff System code prefix for jewellery is
7113.
Below are the 15 countries that exported the highest dollar value worth of jewellery during
2018.

1. China: US$13.3 billion (12.9% of total jewellery exports)

2. India: $12.4 billion (12%)
3. Switzerland: $11.8 billion (11.4%)
4. United States: $9.9 billion (9.6%)
5. United Arab Emirates: $8.6 billion (8.3%)
6. Hong Kong: $7.1 billion (6.9%)
7. Italy: $7.1 billion (6.8%)
8. France: $5.8 billion (5.6%)
9. United Kingdom: $4.4 billion (4.3%)
10. Turkey: $4.4 billion (4.3%)
11. Thailand: $3.9 billion (3.7%)
12. Singapore: $2.4 billion (2.3%)
13. Indonesia: $2 billion (2%)
14. Germany: $1.9 billion (1.9%)
15. Malaysia: $1.4 billion (1.3%)

The listed 15 countries shipped 93.3% of global jewellery exports in 2018 by value.

Among the top exporters, the fastest-growing jewellery exporters since 2014 were: France
(up 27.7%), Germany (up 18%), Switzerland (up 8.9%) and Italy (up 1.8%).

Those countries that posted declines in their exported jewellery sales were led by: China
(down -72.5%), Singapore (down -29.6%), United Arab Emirates (down -27.4%), Malaysia
(down -26.6%) and United Kingdom (down -15%).
 ENTRY MODE IN FOREIGN COUNTRY
There are various types of approaches to go for international business. No one market entry
strategy works for all international markets. Direct exporting may be the most appropriate
strategy in one market while in another you may need to set up a joint venture and in
another you may well license you’re manufacturing. There will be a number of factors that
will influence your choice of strategy, including, but not limited to, tariff rates, the degree of
adaption of your product required, marketing and transportations costs. While these factors
may well increase your costs it is expected to increase in sales will offset these costs. The
following strategies are the main entry options open to you.

1. DIRECT EXPORTING 6. BUYING A COMPANY

2. LICENSING 7. PIGGYBACKING
3. FRANCHISING 8. TURNKEY PROJECTS
4. PARTNERING 9. GREENFIELD INVESTMENTS
5. JOINT VENTURE

There are a variety of ways in which a company can enter a foreign market. No one market
entry strategy works for all international markets. Direct exporting may be the most
appropriate strategy in one market while in another you may need to set up a joint venture
and in another you may well license you’re manufacturing. There will be a number of
factors that will influence your choice of strategy, including, but not limited to, tariff rates,
the degree of adaptation of your product required, marketing and transportation costs.
While these factors may well increase your costs it is expected the increase in sales will
offset these costs. The following strategies are the main entry options open to you.

Direct Exporting
Direct exporting is selling directly into the market you have chosen using in the first instance
you own resources. Many companies, once they have established a sales program turn to
agents and/or distributors to represent them further in that market. Agents and distributors
work closely with you in representing your interests. They become the face of your company
and thus it is important that your choice of agents and distributors is handled in much the
same way you would hire a key staff person.

Licensing
Licensing is a relatively sophisticated arrangement where a firm transfers the rights to the
use of a product or service to another firm. It is a particularly useful strategy if the purchaser
of the license has a relatively large market share in the market you want to enter. Licenses
can be for marketing or production. Licensing).

Franchising
Franchising is a typical North American process for rapid market expansion but it is gaining
traction in other parts of the world. Franchising works well for firms that have a repeatable
Business model (eg. food outlets) that can be easily transferred into other markets. Two
caveats are required when considering using the franchise model. The first is that your
business model should either be very unique or have strong brand recognition that can be
utilized internationally and secondly you may be creating your future competition in your
franchisee.

Partnering
Partnering is almost a necessity when entering foreign markets and in some parts of the
world (e.g. Asia) it may be required. Partnering can take a variety of forms from a simple co-
marketing arrangement to a sophisticated strategic alliance for manufacturing. Partnering is
a particularly useful strategy in those markets where the culture, both business and social, is
substantively different than your own as local partners bring local market knowledge,
contacts and if chosen wisely customers.

Joint Ventures
Joint ventures are a particular form of partnership that involves the creation of a third
independently managed company. It is the 1+1=3 process. Two companies agree to work
together in a particular market, either geographic or product, and create a third company to
undertake this. Risks and profits are normally shared equally. The best example of a joint
venture is Sony/Ericsson Cell Phone.

Buying a Company
In some markets buying an existing local company may be the most appropriate entry
strategy. This may be because the company has substantial market share, are a direct
competitor to you or due to government regulations this is the only option for your firm to
enter the market. It is certainly the most costly and determining the true value of a firm in a
foreign market will require substantial due diligence. On the plus side this entry strategy will
immediately provide you the status of being a local company and you will receive the
benefits of local market knowledge, an established customer base and be treated by the
local government as a local firm.

Piggybacking
Piggybacking is a particularly unique way of entering the international arena. If you have a
particularly interesting and unique product or service that you sell to large domestic firms
that are currently involved in foreign markets you may want to approach them to see if your
product or service can be included in their inventory for international markets. This reduces
your risk and costs because you are essentially selling domestically and the larger firm is
marketing your product or service for you internationally.

Turnkey Projects
Turnkey projects are particular to companies that provide services such as environmental
consulting, architecture, construction and engineering. A turnkey project is where the
facility is built from the ground up and turned over to the client ready to go – turn the key
and the plant is operational. This is a very good way to enter foreign markets as the client is
normally a government and often the project is being financed by an international financial
agency such as the World Bank so the risk of not being paid is eliminated.
Greenfield Investments
Greenfield investments require the greatest involvement in international business. A
Greenfield investment is where you buy the land, build the facility and operate the business
on an on-going basis in a foreign market. It is certainly the most costly and holds the highest
risk but some markets may require you to undertake the cost and risk due to government
regulations, transportation costs, and the ability to access technology or skilled labour.
 INDIA’S BILATERAL REALTIONSHIP WITH SELECTED COUNTRY
 India-Hong Kong Bilateral Relationship:

India’s relations with Hong Kong are historical and date back to the 1840s when Hong
Kong became a British colony after the Treaty of Nanking as the result of the First Opium
War. From trading ties established in the middle of the 19th century, relations today
span sectors such as investment finance, services, maritime, shipping, logistics, culture,
education and trade. The Commission for India in Hong Kong was set up in 1951 and it
was re-designated as Consulate General of India on 15 October 1996 in advance of
China’s assumption of sovereignty over Hong Kong on July 1, 1997. The Consulate also
has accreditation to Macau, which reverted from Portuguese to Chinese sovereignty on
December 19, 1999.

Bilateral Agreements:
Agreements concluded with Hong Kong include:

 Agreement on Reciprocal Enforcement of Judgements (1968), [which was re-notified by

Government of India in July 2012 due to a change in the nomenclature of Hong Kong
courts following handover of sovereignty to China in 1997],
 Agreement Constituted by Exchange of Letters Between the PRC and India on matters
related to the Consular Convention (December 1991),
 Air Services Agreement (1996), and MoU on Air Services Agreements pursuant to the Air
Services Agreement (February 2012),
 Customs Cooperation Agreement (1997),
 Surrender of Fugitive Offenders (1997), and
 Agreement on Mutual Legal Assistance in Criminal Matters (September 2009).
Following MoU’s have been signed between India and Hong Kong:

 MoU between Hong Kong Monetary Authority (HKMA) and Reserve bank of India (RBI)
on Supervisory Cooperation and Exchange of Information signed on July 17, 2014.
 Agreement on Transfer of Sentenced Persons was signed on January 20, 2015 and has
since come into effect.
 India Trade Promotion Organization (ITPO) Chairman visited Hong Kong on 04 October
2016 and signed a MoU with Hong Kong Trade Development Council (HKTDC) to
strengthen the economic partnership and increase bilateral commerce between India
and Hong Kong, especially for small and medium-sized enterprises.
Bilateral Trade:
India was Hong Kong’s 4th largest export market destination in 2015 (after China, US, Japan)
and Hong Kong is India’s 3rd largest export market (after US, UAE) in FY 2015-16. India-Hong
Kong trade in 2015 was US$ 23.7 billion. During 2015, India continued to retain its position
as the 7th largest trading partner of Hong Kong. The total trade in Jan-Oct 2016 has
increased by 12.1% to 20.22 billion USD this year as compared to last year, despite the
decline in Hong Kong’s global trade.

Indian exports to Hong Kong primarily include Pearls, precious & semi-precious stones,
Leather, Electrical Machinery, Cotton, Fish & crustaceans, Machinery, Articles of apparel,
Organic chemicals, , Optical & medical instruments and Plastics while Indian imports from
Hong Kong include Pearls, precious and semi-precious stones, Electrical machinery,
Machinery, Optical & medical instruments, Clocks & watches, Plastic and articles thereof,
Special woven fabrics, Miscellaneous manufactured articles, Organic Chemicals and paper.
 India-US Bilateral Relationship:

Trade and Investment

In 2018, India GDP was an estimated $2.7 trillion (current market exchange rates); real GDP
was up by an estimated 7.1%; and the population was 1.3 billion. (Source: IMF)
U.S. goods and services trade with India totalled an estimated $142.1 billion in 2018. Exports
were $58.9 billion; imports were $83.2 billion. The U.S. goods and services trade deficit with
India was $24.2 billion in 2018.
India is currently our 9th largest goods trading partner with $87.5 billion in total (two way)
goods trade during 2018. Goods exports totalled $33.1 billion; goods imports totalled $54.4
billion. The U.S. goods trade deficit with India was $21.3 billion in 2018.
Trade in services with India (exports and imports) totalled an estimated $54.6 billion in
2018. Services exports were $25.8 billion; services imports were $28.8 billion. The U.S.
services trade deficit with India was $3.0 billion in 2018.
According to the Department of Commerce, U.S. exports of Goods and Services to India
supported an estimated 197 thousand jobs in 2015 (latest data available) (82 thousand
supported by goods exports and 116 thousand supported by services exports).

Exports

 India was the United States' 13th largest goods export market in 2018.
 U.S. goods exports to India in 2018 were $33.1 billion, up 28.9% ($7.4 billion) from
2017 and up 87.3% from 2008. U.S. exports to India account for 2.0% of overall U.S.
exports in 2018.
 The top export categories (2-digit HS) in 2018 were: precious metal and stone
(diamonds) ($7.9 billion), mineral fuels ($6.2 billion), aircraft ($3.0 billion), machinery
($2.2 billion), and optical and medical instruments ($1.6 billion).
 U.S. total exports of agricultural products to India totalled $1.5 billion in 2018, our
18th largest agricultural export market. Leading domestic export categories include:
tree nuts ($662 million), cotton ($329 million), fresh fruit ($163 million), dairy
products ($48 million), and prepared food ($33 million).
 U.S. exports of services to India were an estimated $25.8 billion in 2018, 8.6% ($2.1
billion) more than 2017, and 157% greater than 2008 levels. Leading services exports
from the U.S. to India were in the travel, intellectual property (computer software,
audio and visual related products), and transport sectors.
Imports

 India was the United States' 10th largest supplier of goods imports in 2018.
 U.S. goods imports from India totalled $54.4 billion in 2018, up 11.9% ($5.8 billion)
from 2017, and up 111.7% from 2008. U.S. imports from India account for 2.1% of
overall U.S. imports in 2018.
 The top import categories (2-digit HS) in 2018 were: precious metal and stone
(diamonds) ($11 billion), pharmaceuticals ($6.3 billion), machinery ($3.3 billion),
mineral fuels ($3.2 billion), and vehicles ($2.8 billion).
 U.S. total imports of agricultural products from India totalled $2.7 billion in 2018, our
15th largest supplier of agricultural imports. Leading categories include: spices ($261
million), rice ($216 million), essential oils ($194 million), processed fruit & vegetables
($141 million), and other vegetable oils ($128 million).
 U.S. imports of services from India were an estimated $28.8 billion in 2018, 2.2%
($625 million) more than 2017, and 127% greater than 2008 levels. Leading services
imports from India to the U.S. were in the telecommunications, computer, and
information services, research and development, and travel sectors.

Trade Balance

 The U.S. goods trade deficit with India was $21.3 billion in 2018, a 7.1% decrease
($1.6 billion) over 2017.
 The United States has a services trade deficit of an estimated $3.0 billion with India
in 2018, down 32.5% from 2017.

Investment

 U.S. foreign direct investment (FDI) in India (stock) was $44.5 billion in 2017, a 15.1%
increase from 2016. U.S. direct investment in India is led by professional, scientific,
and technical services, manufacturing, and wholesale trade.
 India's FDI in the United States (stock) was $9.8 billion in 2017 (latest data available),
up 11.5% from 2016. India's direct investment in the U.S. is led by professional,
scientific, and technical services, manufacturing, and depository institutions.
 Sales of services in India by majority U.S.-owned affiliates were $27.0 billion in 2016
(latest data available), while sales of services in the United States by majority India-
owned firms were $17.0 billion.
 India – UAE Bilateral Relationship:

Introduction

India and United Arab Emirates (UAE) enjoy strong bonds of friendship founded on Millennia
old cultural, religious and economic intercourse between the two regions. People – to-
people contacts and barter trade between two regions have existed for centuries. The
relationship flourished since the creation of the UAE Federation in 1971 and trade has
played a major role in the strengthening the bilateral relationship.
Bilateral Trade

According to Government of India figures, in FY 2015-16, trade between India and UAE
crossed US$ 49bn, with Indian exports worth US$ 30bn to the UAE and US$ 19bn worth of
UAE’s exports to India, thus making UAE India’s one of the top trading partner. Indian
businessmen and traders have contributed significantly to the economic fabric of UAE.
Indian professionals also occupy important positions in various banks, private companies
and business establishments in the country. The unskilled and semi-skilled workers from
India are a dominant force in the construction industry. The contribution of Indians to the
growth of UAE is acknowledged by the rulers and the people of UAE.

Bilateral Economic & Commercial Relations

India and UAE have shared trade links through the centuries. The trade, which was
dominated by traditional items such as dates, pearl and fishes, underwent a sharp change
after the discovery of oil in UAE (oil exports begun from Abu Dhabi in 1962). With the
emergence of UAE as a unified entity in 1971, exports from India started growing gradually
over the years. The real impetus, however, started after Dubai positioned itself as a regional
trading hub by early 1990s and about the same time, the economic liberalization process
started in India.

Growing India-UAE economic and commercial relations contribute to the stability and
strength of a rapidly diversifying and deepening bilateral relationship between the two
countries. Both sides are striving to further strengthen these ties for mutual benefits. India-
UAE trade, valued at US$ 180 million per annum in the 1970s, is today around US$50 billion
making UAE, India’s third largest trading partner for the year 2017-18 after China and US.
Moreover, UAE is the second largest export destination of India (after US) with an amount
of over US$ 28 billion for the year 2017-18. For UAE, India is the second largest trading
partner for the year 2017 with an amount of around US$ 35 billion (non-oil trade). During
the visit of Prime Minister in August 2015 to UAE, the two sides agreed to further expand
bilateral trade by 60 percent in the next five years.

India’s Major Exports and Imports to the UAE:

India's exports to the UAE are well diversified with a large basket. India's major export items
to the UAE are: Petroleum Products, Precious Metals, Stones, Gems & Jewellery, Minerals,
Food Items (Cereals, Sugar, Fruits & Vegetables, Tea, Meat, and Seafood), Textiles
(Garments, Apparel, Synthetic fiber, Cotton, Yarn) and Engineering & Machinery Products
and Chemicals. India's major import items from the UAE are: Petroleum and Petroleum
Products, Precious Metals, Stones, Gems & Jewellery, Minerals, Chemicals, Wood & Wood
Products. India also imported 14.29 MMT (US$ 6,122.20 Million) of crude oil from UAE in
2017-18.

Investments:

There is an estimated US$10-11 billion UAE investment in India of which around US$5.33
billion (Dec. 2017) is in the form of foreign direct investment, while the remaining is
portfolio investment. UAE is the tenth biggest investor in India in terms of FDI. UAE's
investments in India are concentrated mainly in five sectors: Services Sector (9.44%), Power
(8.97%), Construction Development: Townships, Housing, Built-Up Infrastructure and
Construction-Development Projects (8.81%), Air Transport (Including Air Freight) (7.42%),
Hotel & Tourism (7.29%).

During the visit of Prime Minister in August 2015 to UAE, it is decided to establish UAE-India
Infrastructure Investment Fund, with the aim of reaching a target of USD 75 billion to
support investment in India's plans for rapid expansion of next generation infrastructure,
especially in railways, ports, roads, airports and industrial corridors and parks. During the
successive VVIP visit, the leaders of both the countries reviewed the progress in realizing the
USD 75 billion target for UAE investments in India.
 SELECTION OF LOCATION

The location of plant is at Surat, Gujarat, which popularly known as Diamond city of the
world. Surat is a hub for diamond cutting and polishing. It is referred as diamond city
because 90 percent of the world's diamonds are polished in this city. It is also famous for its
silk fabric and cotton. The first diamond workshops in Gujarat appeared in Surat and
Navasari in the late 1950s. The major group working in this industry is people from the
Saurashtra region of Gujarat.

As Surat has already established market of gems and jewellery, raw material are easily
available, transportation cost also gets reduced and also we can get expertise labour here.
Every year there is gems and jewellery show is been organized in Surat through which every
new seller can show their own talent of designing of gems.

An exclusive vertical Gems & Jewellery Park will be developed in Ichchhapore Park, which
was announced in the year 2004.The announcement for the gems and Jewellery Park at
Ichchhapore, Surat was made in 2004. Approximately 350 jewellery manufacturing and
diamond processing companies invested in plots at the park to set up manufacturing units.
 PESTLE ANALYSIS
Political forces:

These are the  forces that tends to be altered by the influence of government on the infrastructure of
country. The political factors may involves environment regulations, employment laws, tariffs, tax
policy, trade restrictions, political stability and reforms. It is noteworthy, that the charities needs to
be included where a government are not willing services and goods to be provided.

Economic factors:

The economic factors or forces involves interest rates, inflation, and growth of economy, cost of
living, working hours, wage rate and exchange rates. Combining these factors, it last greater and
inevitable impact on organization.

Social factors:

The culture or social influence on certain businesses vary from country to country. It is significant
to consider these factors. The social factors includes safety and health consciousness, various
demographics, population growth rates and cultural aspects.

Technological factors:

Notably, Gems and jewellery technology is one of the most important way of being competitive in
the highly competitive market arena. Not only this, it drives globalization, the factors includes
environmental and ecological aspects, and available services as well as products. An organization
should innovate and be compatible with the technologies.

Legal factors:

The legal factors involves the certain laws and regulations which might effect on the business
operations of an organization. It also includes impending and current legislation that tends to impact
on the industry in areas including competition, employment, safety and health. An organization
should consider the influence of the national and international laws where the organization would
originate the business operations.

Environmental factors:

The environmental factors include all those factor lasting impact or influence, the surrounding
environment most likely determine environmental factors. The factors involves awareness of the
seasonal or climate change or terrain variation. The analysis of the environment including internal
and external elements is vital for organization since it impacts on the performance of an
organization.
 PROMOTIOAL TOOLS
Tools of Promotion - Advertising, Sales Promotion, Public Relation & Direct Marketing

The 4 Ps of marketing are product, price, place and promotion. All four of these elements
combine to make a successful marketing strategy. Promotion looks to communicate the
company’s message across to the consumer. The four main tools of promotion are
advertising, sales promotion, public relation and direct marketing.

Advertising:
Advertising is defined as any form of paid communication or promotion for product, service
and idea. Advertisement is not only used by companies but in many cases by museum,
government and charitable organizations. However, the treatment meted out to
advertisement defers from an organization to an organization.

Advertising development involves a decision across five MS Mission, Money, Message,

Media and Measurement.

Mission looks at setting objectives for advertising. The objectives could be to inform,
persuade, remind or reinforce. Objective has to follow the marketing strategy set by the
company.

Money or budget decision for advertising should look at stage of product life cycle, market
share and consumer base, competition, advertising frequency and product substitutability.

Message’s development further is divided into four steps, message generation, and message
Evaluation and selection, message execution, and social responsibility review.

Once the message is decided the next step is finalizing the media for delivering the message.
The choice of depends on reach of media, frequency of transmission and potential impact
on customer. Based on this choice of media types are made from newspaper, television,
direct mail, radio, magazine and the internet. After which timing of broadcast of the
message is essential as to grab attention of the target audience.

Checking on the effectiveness of communication is essential to company’s strategy. There

are two types of research communication effect research and sales effect research.

Sales Promotion:
Promotion is an incentive tool used to drive up short term sales. Promotion can be launched
directed at consumer or trade. The focus of advertising to create reason for purchase the
focus of promotion is to create an incentive to buy. Consumer incentives could be samples,
coupons, free trial and demonstration. Trade incentive could be price off, free goods and
allowances. Sales force incentive could be convention, trade shows, competition among
sales people.
Sales promotion activity can have many objectives, for example, to grab attention of new
customer, reward the existing customer, and increase consumption of occasional users.
Sales promotion is usually targeted at the fence sitters and brand switchers.

Sales promotional activity for the product is selected looking at the overall marketing
objective of the company. The final selection of the consumer promotional tools needs to
consider target audience, budget, competitive response and each tool’s purpose.

Sales promotion activity should under-go pre-test before implementation. Once the activity
is launched it should be controlled as to remain within the budget. Evaluation program is a
must after implementation of the promotional scheme.

Public Relations:
Companies cannot survive in isolation they need to have a constant interaction with
customers, employees and different stakeholders. This servicing of relation is done by the
public relation office. The major function of the public relation office is to handle press
releases, support product publicity, create and maintain the corporate image, handle
matters with lawmakers, guide management with respect to public issues.

Companies are looking at ways to converge with functions of marketing and public relation
in marketing public relation. The direct responsibility of marketing public relation (MPR) is
to support corporate and product branding activities.

MPR is an efficient tool in building awareness by generating stories in media. Once the story
is in circulation MPR can establish credibility and create a sense of enigma among sales
people as well as dealers to boost enthusiasm. MPR is much more cost effective tool than
other promotional activities.

Direct Marketing:
The communication establishes through a direct channel without using any intermediaries is
referred to as direct marketing. Direct marketing can be used to deliver message or service.
Direct marketing has shown tremendous growth in recent years. The internet has played
major part in this growth story. Direct marketing saves time, makes an experience personal
and pleasant. Direct marketing reduces cost for companies. Face to face selling, direct mail,
catalogue marketing, telemarketing, TV and kiosks are media for direct marketing.

Advertisement, Promotional activity, Public relation and direct marketing play an essential
role in helping companies reaches their marketing goals.

Managing the Sales Force:

The face of any organization is the sales force. Companies spend a considerable amount of
time and money on sales force rather than on any other promotional activity. However,
sales force is expensive and companies are looking forward to managing them in an efficient
and effective manner designing of the Sales Force
Sales force is linking between companies and customer. Therefore, companies have to be
careful in designing and structuring sales force.

1. The first step is setting out an objective for sales force. Earlier companies had a
single objective increasing sale making it objective also for sales people. Sales people
are asked to perform a search for prospective clients or lead. Sales people are asked
to balance time between a prospective customer and current customer. Effective
communication of product and services is essential to close the deal. Sales people
also play an important role in after sales service and can make a difference for the
company. Sales people are eyes and ears of the company in the market gathering
information about competition and customer changing demands.
2. The second step is use sales people strategically. Sales people have to combine
efforts with other team members to achieve the objective. Sales people should be
aware how to analyze market data been provided and convert them into marketing
strategies.
3. The third step is deciding the structure of the sales force. The structure of the sales is
dependent on the strategy followed by the company. Common sales force structures
are as follows:-

1. Territorial structure is used where every sales representative is assigned

specific geographical area. This structure is preferred for building
relationships with locals.
2. Product structure is used for complex and un- related product portfolio. Here
the sales people are directly associated with research and development of
the products.
3. Market structure is used if the companies are operating different industry or
market segments. Every sales force specializes in a definite market and helps
push a product efficiently across the given market. However, the
disadvantage would arise if customers are located over a wide geographical
area.
4. Complex structure is used when companies are in business of selling
complex product to different customer across a large geographical area.
Here sales force structure is a combination of other structures discussed.

Once the structure is designed companies need to make a decision with respect to
the size of the sales force. The size of the sales force is dependent on the market size
and number of customers.

4. The next step is to design compensation for the sales force. Compensation plays a
big motivational factor for sales people. Companies follow a structure of a fixed
amount plus a variable amount depending of success achieved in the market.
Allowances play an important factor in the salary owing to continuous travel and
market visits.