Jewellery retailer Damas mulls quitting India

Dubai, Apr 11 (PTI) Jewellery retailer Damas is mulling
quitting India, the world’s biggest gold market, drawing
curtains on its plans to float a major joint venture and open
100 stores across the subcontinent.
Responding to media reports to this effect, a company
spokesperson told PTI in an email that the statements have
been made with respect to the company’s ongoing operational
restructuring.
"However, Damas is still considering its options at this
time and no conclusive decisions have been made yet," the
spokesperson said. However, no further details have been
announced as the company wants to disclose the same "via a
market announcement".
Damas had planned to take advantage of India’s lucrative
USD 900 billion market by opening 100 stores across the
country over three years in a joint venture it signed with the
retailer Gitanjali Group.
But the plans were stalled since March last year when the
Dubai Financial Services Authority (DFSA) fined Damas and
banned the jeweller’s founding family from executive
positions.
"We are looking at our business in Pakistan and India,
our relationship and the way we entered the country," said
Ibrahim Belselah, the chairman of Damas.
"Within our new corporate governance, it's not the best
route to do business because we want to be absolutely
transparent," he was quoted by the local media as saying.
Gold demand in India has grown 25 percent despite 400 per
cent appreciation in the value of rupee in the last decade,
making the country a key driver of global gold demand, the
World Gold Council research recently revealed.
It said that by 2020 cumulative annual demand for gold in
India will increase in excess of 1,200 tonnes or approximately
Rs 2.5 trillion at current price levels. The council expects
an increase by over 30 percent in real terms.
The country’s continued rapid growth, which will have
significant impact on income and savings, will increase gold
purchasing by almost 3 percent per annum over the next decade.
In 2010, total annual consumer demand reached 963.1
tonnes. As seen in the last decade, Indian demand for gold
will be driven by savings and real income levels, and not by
price, the council said in a statement.