The Indian gems and jewelry industry has been a money spinner for many centuries. Though the prices of the precious metals and stones are soaring, the sales have not stagnated. Newer Indian retailers and foreign players have entered the market with an international demand for quality standards and fashion trends. The Indian gems and jewelry sector is largely unorganized at present. There are over 15,000 players across the country in the gold processing industry of which only about 80 players have a turnover of over $4.15 mn (Rs. 200 mn). There are about 450,000 goldsmiths spread throughout the country. This paper deliberates on the risk factors that arise due to the impact of volatility of the global metal and oil prices. The major trade risks are: the unorganized market structure, lack of technology and low profitability. The retailers and family jewelers have a set of practices that match the dynamics of trade. This paper answers the questions related to gems and jewelry trade, the evolving practices due to the increasing volatility of metal prices, the best practices of the traders who trade in wholesale and retail and the need for a paradigm shift in the risk aptitudes and practices in Bangalore.

India is one of the first countries to make the finest jewelry from minerals and metals, and even today, most of the jewelry made in India are handmade and hand-polished. The industry is dominated by family jewelers who constitute nearly 96% of the market. Organized players, such as Tata with its Tanishq brand and Reliance Jewels, the new entrant, have, however, been growing steadily carving a 4-8% market share. As India's jewelry market matures, it is expected to be better organized so that the share of family jewelers declines.

The Indian gems and jewelry industry has made rapid strides in design, powered by a new generation of young, professionally trained and technology driven designers. Many Indian jewelry manufacturing facilities are equipped with the latest CAD/CAM and other advanced design systems. Technology solutions are also available for the production, control, supply chain and inventory management in the jewelry industry. The special economic zones and gems and jewelry parks developed in various states offer technology-enabled environments that are conducive to growth and quality production.