Jewellery Industry, the Oldest Commerce of the Country

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The jewellery industry of Bangladesh is one of the oldest industries of the country. The artisans of this industry have a long reputation as producers of the finest quality gold ornaments. Gold Jewellery industry in Bangladesh is a highly labor intensive industry which employs about 2-3 lakhs of artisans and a large number of labor for carrying out the retail trade in the local markets. The industry’s investment-employment ratio is the lowest compared with many other industries. Though it is one of the oldest industries in the country, it has not developed to its desired potential because of certain limitations which involved the non availability of gold to the business, financial support and a local market. As a result, the industry has not developed in the area of technology, production process, designing and innovation of jewellery products. The major contrails faced by the jewellery industry in Bangladesh is the supply of gold which is banned from import. Apparently whatever gold is available to the jewellers and artisans comes mostly from the customers who bring their ornaments for transformation of designs. The state of technology has become not only out dated but also inadequate as far as the production process, tools, accessories and chemicals are concerned. The main tasks in the making of jewelleries are performed with hands using only a few time old hand tools.

Customer Focus
Mostly women are interested to buy traditional kinds of jewelleries whereas youth are attracted to jewelleries made of other materials. It is traditional in marriage ceremony for us to buy gold jewelleries and Hindu communist use gold jewelleries to decorate their Idols. Both women and youth people love to wear jewelleries made of soil, wood, plastic and other types of materials, even we have jewelleries made from flowers which are used in time of marriage ceremony, which are unique and makes women look more beautiful.

However, a large proportion (about 800) indicated their desire to be in the export business if the desired assistance in the form of supply of gold, tools and accessories, finances, marketing information are provided to them. Finance has been indicated by some as a major constraint, next to the supply of gold by many. In the absence of any institutional finances these retailers have to depend solely on the funds available from family sources, friends and profits from their business. Further they also indicated that the taxes levied by the government as well as the rules and regulations imposed on this trade deters the pursuance. Under the present circumstances the growth and development of gold jewellery have not much prospect in the local markets. However, opening up of export channels in this sector may help the industry to grow as a result of caving a broader profitable market. The export trade in gold jewelleries will not only help in the earning of valuable foreign exchange for the country but also would provide the security of jobs for the already employed 2-3 lakhs in this sector.

Financing of the industry
Another most important requirement for the growth and development of any industry is the source of finance. Because of the specific nature of the gold jewellery industry, the industry needs more support than other industries. Most of the cases the financing comes from business profits and family loans. No significant financing is available from the banks as loans. This is probably due to the fact that banks in Bangladesh do not value the risk-reward relationship with the jewellery community and above all the country never had a flourishing money market.

Gold Plated Jewellery
Trends of Bangladeshi jewelleries are moving from gold to gold-plated jewelleries mainly because of rise in price. Now, the international market of price has increase, which has influenced the local jewelers to increase the price. The market researcher has found the price increased such as, in 2003 the price was Tk 20,614 per bhari (11.66 grams) and mow it has become Tk 29,200. Md. Julficker Hossain the jewel owner of Gayna Ghar, a jewellery shop in Dhanmondi market said that “customer’s satisfaction is very important to me. Our aim is to make a client look beautiful with beautiful ornament. Every customers is equal to me, I visualize her face, elegance, look while designing jewellery for her.” It has been figure out that average sale of the branded gold jewellery shops per month is about minimum 3 crores.

Availability of Raw Material
Most of the gold now being handled by the retailers is provided by the customers in the form of jewellery they possess for transforming into new designs as well as those sold by the poor villagers who are forced to sell their ornaments to tide over economic difficulties. being supported by incidents of It has been learnt as well as recent custom’s seizure of gold that some amount of gold has always been entering the country through illegal routes. Informally, this constituted a major supply source for gold jewellery retailers. source of supply consists of the limited Another small quantities of gold ornaments being brought in-side the country by the Bangladeshi nationals residing abroad.
The Bangladesh Jewellers’ Society (Bajews) has demanded that value added tax (VAT) on gold and silver jewelleries be reduced to 1.5 percent from the 5 percent proposed in the budget. Bajews General Secretary Enamul Haque Khan made this demand at a press conference held at the National Press Club. He said the nation’s jewellery crafts industry was under threat due to increased international market prices and lower VAT rates in India. The budget for FY 2015-16 presented on Jun 4 in Parliament proposed to increase VAT to 5 percent from the existing 3 percent on gold and silver jewellery. The increase in VAT last year also had a negative impact on the industry, said the business leader. “To save the jewellery industry, Bangladesh needs to keep VAT rates between 1 to 1.5 percent, which will encourage our consumers to pay VAT and protect the local industry.”

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