Indian Jewelers Trying to Increase Rural Jewelry Demand

(IDEX Online News) – Jewelers in India are working hard to come up with schemes to increase rural gold jewelry demand following a period of unseasonable rains and uncertainty about the coming monsoon season. The rain has damaged crops in a number of areas in the country.

According to The Economic Times, jewelers are reducing inventory at rural outlets, promoting lightweight pieces and “aggressively pushing” monthly instalment schemes in a bid to increase flagging sales.

“In places like Erode [Tamil Nadu], Coimbatore [Tamil Nadu] and Thrissur [in Kerala], the situation is quite grim as the textile industry is not picking up there," Manish Jain, chairman of the All India Gems & Jewellery Trade Federation, told the paper. “We are having a dialogue with the jewelers to tide over the crisis. The payment cycle is being delayed, and the cotton farmers do not have enough money to buy jewelry.”

Keyur Shah, CEO of Muthoot Precious Metals division at Muthoot Pappachan Group told the paper that he anticipates a drop in gold coin consumption. To try to generate sales, the group has introduced jewelry weighing up to 10 grams. “This will help rural India accrue jewelry slowly.”

In addition, jewelers are also fearful that the rainfall in the upcoming monsoon season is likely to be below average. If this is the case, demand for gold is likely to fall even further.