Assocham survey: Nirav Modi fraud caused decrease in demand for diamond jewellery
A recent Assocham survey has reported that the demand for diamond jewellery in India, especially in the unorganised sector, has decreased by between ten and 15 percent as a result of the fraud involving jewellers Nirav Modi and Mehul Choksi.
The industry lobby Assocham has asserted that the ongoing diamond fraud case at the Punjab National Bank (PNB), which has been classed as the largest in India’s banking history and totals around 13,000 crore rupees (approximately two billion US dollars), has damaged the industry as a whole. With other factors affecting the industry as well, both big brands and small players are having to re-think their strategies as the last two months has seen demand drop by between ten and 15 percent.
There have also been accusations that Choksi’s business Gitanjali Gems forged purity certificates to sell jewellery and mixed cheap gems grown in labs with real diamonds. The Gem and Jewellery Export Promotion Council (GJEPC) has, however, dismissed these claims as slander. The claims may indeed be false but the distrust they have caused in the minds of consumers appears to be very real considering the recent drop in demand.
The GJEPC has consistently assured that the Modi and Choksi scandal is the exception and not the rule in India’s diamond jewellery industry. However, in the wake of the investigation, the jewellery brands Nathella Sampath and Kanishk Gold have both been investigated for fraud. The current climate is one of suspicion and so now both large businesses and small retailers will be searching for a way to make sure the current financial year picks up after a rocky start.
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