Mumbai, July 24: The gems and jewellery industry is upbeat about the Chinese market after the revaluation of the yuan.

While India has already made its mark in cutting and polishing diamonds, China is seen as a promising market where demand for jewellery is growing rapidly. “There is a 12 per cent growth in jewellery demand. With the Yuan revalued, India can emerge as an efficient supplier of jewellery and diamonds,” an exporter said.

China has allowed a 2 per cent appreciation of the yuan, which earlier had a fixed rate against the greenback. Consequently, the yuan was valued at 8.11 to a dollar against 8.28. The People’s Bank of China also announced that it would be tying it to a basket of currencies of the country’s main trading partners.

Though many see the revaluation as modest, exporters in India have welcomed it as it would make their products more competitive against their Chinese counterparts. The textile industry also sees big gains.

China is yet to create a niche for itself in the international gems and jewellery market. The country, however, is making steady progress with its rapidly growing diamond processing units.

Experts feel that the country could pose a stiff competition to India given its labour force, which is not only cheap, but also disciplined. Its growth is already strong, throwing up more affluent customers who could afford gems and jewellery.

According to Gem & Jewellery Export Promotion Council chairman Bakul Mehta, wages are a major constituent of the total product cost.

“With the revaluation of the yuan, the Chinese products will be a bit more expensive, as their labour cost will increase with respect to the dollar. Moreover, imports into China will now be inexpensive,” Mehta added.