Domestic diamond and gold jewellery exporters have started promoting sales in newer markets, including Japan and the CIS countries.
The move follows anticipation of lower sales in the US market in the wake of the termination of generalised system of preferences, the US incentive that helped domestic jewellers boost exports to that country.
If industry sources are to be believed, special attention is being paid to markets in West Asia, which is likely to see a strong growth in the sales of Indian jewellery. The UAE imported jewellery worth $3,372.87 million in 2006-07, a rise of 31.12 per cent over $2,572.39 million last year.
"The Indian diamond jewellery sector will not be affected at all by the GSP termination this year as the order-book position is full and cannot be revoked. But, next year, yes," said Sanjay Kothari, chairman, Gems and Jewellery Exports Promotion Council.
"Therefore, we have started exploring new avenues to maintain our sales growth," he added.
Under the GSP, India availed of 6 per cent duty rebate for jewellery exports to the US and the facility was extended periodically. The GSP expired on June 30 and the US government refused another extension.
Meanwhile, leading exporters have already started feeling the heat as new orders for the Christmas season have dried up. Although the order flow for the Christmas season will start in a month, jewellery exporters have started pitching for fresh orders.
The country's exports to the US are likely to decline dramatically in the next financial year from the current $4 billion as exports to the US will now attract a 6 per cent duty on jewellery from non-GSP countries, making Indian jewellery exports virtually non-competitive.
Jewellery producers have outlined new sales structure in developing markets, including India and China, but these markets are not as remunerative as the US.
A majority of Indian jewellery exports to the US range between $100 and $500, which is considered as the mid-value segment. High-value jewellery ranging above $1,000 would no longer be attractive in the US, said an exporter.
Hence, jewellers have decided to export loose diamonds of large size and process them in the US for sales at competitive prices in the local market.
Meanwhile, the potential for jewellery sales growth in India is 26 per cent, while it is 20 per cent in China and 5-7 per cent in the US. The US still remains in the forefront of sales because of higher realisation.
Talking about the sales potential in the Japanese market, Kothari said the country remained a lucrative market for high- and medium-value jewellery items.
