Sachin Jain, Regional CEO – India, World Gold Council, an organisation that champions the role gold plays as a strategic asset, addressed the GIA Alumni Collective event at BDB recently.
We present some of the key take aways from his presentation.
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India is coming of age! We are witnessing one of the most exceptional periods in our country’s growth.
The new India is defined by 5Ds –
Even globally, conversations about India have changed from about 15-20 years ago. There is a definite interest in the opportunities within the country.
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Growth in the last decade or so has been quite remarkable with 96 new airports, 52 Vande Bharat trains, the developing of what will become the largest port in the world. India’s economic momentum is serious.
The country is moving towards the goal of Viksit Bharat 2047, a phenomenal vision defined by the Prime Minister. The aim is to boost the rate at which the economy is growing, so that India’s market size in 2047 will be equivalent to the addition of five new “Indias” to the current one.
This presents unique opportunities for the Indian jewellery industry and for all young entrepreneurs.
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We also need to take note of the changes in the global gold industry. Gold has been part of social fabric for millennia, and the Indian housewife has emerged as one of the smartest investors, buying small amounts consistently over the years. Yet, India though being one of the largest consumers did not have any real impact in shaping the industry.
Not any more! Thirty years ago the Central Bank were net sellers while the jewellery sector was the major buyer. The bulk of business was transacted in the West.
Now, 74% of gold business is managed by India, China and Middle East; Central Banks are now buyers (share of about 20-21%); jewellery manufacturing accounts for only about 30-32%; while financial markets drive about 43%. The remaining demand is from technology – gold is used in phones, microchips etc.
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WGC has been working with government bodies like Niti Aayog to develop the concept of a Swarnim Bharat a roadmap for the industry towards Viksit Bharat. It will have multiple components (like price setting, mechanisms for bringing household gold into the mainstream, Gold tourism, a Global Innovation centre for gold, among many others) and WGC will unveil more details later in the year.
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Two key factors that we need to keep in mind.
First, the rise in the value of gold is not a temporary price movement. It is linked to one of the major characteristics of the present times – growing Global Debt. An economy like the US is printing currency to cover its deficit, and while the present government there is drawing up policies aimed at increasing GDP, and reducing debt and inflation, it may be at least 5-7 years before the impact can be seen.
Second, it is imperative to grasp the huge potential of the Indian market. Early movers who launched businesses a decade ago are growing rapidly. The industry needs to understand where the Indian consumer is headed. Ask questions like: Can we build new categories (currently only 6% pf marriages have ab engagement ceremony. How do we take it up to 50%).
Young entrepreneurs need to look at this future and plan for it. Do things today so you can grow towards tomorrow. This time is not going to come again. Take full advantage of such opportunities.
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