Mar 12, 2016, 12.21 PM | Source: PTI
Jewellery demand in the country is expected to rise to 670-685 tonnes, despite volatility in gold prices, India Ratings and Research (Ind-Ra) has said.
Maintaining stable outlook on jewellers, Ind-Ra said it "...expects retailers to fare well underpinned by a sustainable domestic demand, shifting preference towards branded jewellery and fading regulatory headwinds."
However, it added the excise duty hike announced in the Union Budget may have a marginal impact on the demand in the near-term.
Ind-Ra also said that it "Expects domestic jewellery demand to remain robust and grow at 3-5 per cent in 2016 to 670-685 tonnes because such demand remained steady at 600-670 tonnes over 2010-2015... despite gold price volatility on the back of wedding related purchases."
It further said an improvement in demand for coins and bars as consumers seek gold's wealth protection properties in the backdrop of a high economic and political uncertainty globally, turmoil in equity markets and weakening in domestic currency.
For exporters, the agency revised the outlook to negative from stable due to slowing Chinese demand for diamond jewellery.
"Cut Polished Diamond exports to remain under pressure as steady growth in diamond jewellery consumption in the US market will be offset by weaker sales in China and Hong Kong," it added.
Rough diamond prices to decline by another 5-10 per cent in 2016 as key producers lower prices and guide down production to restore the demand supply balance and support the midstream.