Indian gold jewelry demand likely to grow 10% in 2015: ICRA

 

MUMBAI (Scrap Monster): The recent survey conducted by the country’s leading credit rating agency ICRA Ltd shows that the gold jewelry demand in Indian domestic market is poised to witness 10% growth in 2015. The ‘Indian Gold Jewellery Retail Industry’ survey predicts the demand to rise to $32 billion on the back of improving consumer sentiments.

 

According to the survey, domestic gold jewelry demand in the country has continued to remain largely stable ever since Q4 2013. The elevated demand during Q4 2014 is likely to lift the aggregate demand for 2014 to around $29 billion by compensating for the initial demand slump during the initial three quarters. Further, lower gold prices, easing of regulations on gold import and improving consumer sentiments may boost Indian gold demand in the upcoming months, ICRA notes.

 

The survey also predicts that jewelers in the country are likely to announce significant expansion plans during the next 12 months in anticipation of robust volume growth. ICRA takes note of the consolidation happening in the country’s retail jewelry segment. The organized players raised their share from 11% in 2013 to 20% in 2014.

 

ICRA points out that the easing of import norms in May ’14 to allow more star trading houses to import gold under the 80:20 scheme has resulted in higher gold imports by the country. Following the government decision to scrap the 80:20 gold import rule, import volume of gold is expected to remain firm.

 

The strength in US dollar, weakening crude prices and low inflation expectations may limit rise in gold prices. Consequently, the domestic industry in the country expects gold prices to remain largely range bound around present levels. However, surge in physical demand from India and China may drive gold prices to higher levels, ICRA states.