India Bullion and Jewellers Association (IBJA) Director Saurabh Gadgil told PTI that the market sentiment is improving but it has not yet become buoyant.
"If the overall business remains same as the last year or goes marginally up by 5 per cent, we will be very happy," added Gadgil, who is also PNG Jewellers Chairman and Managing Director.
Postponement of salary, less than expected bonus, lack of clarity in removing jewellers from the Prevention of Money Laundering Act (PMLA) are some of the major issues that have dented the market sentiment this Dhanteras and Diwali, the festivals which generally see a lot of buying of precious metals, he added.
"Also, the slowdown in economy has contributed to the sluggish market sentiment," Gadgil said.
The footfalls will increase at stores during the festivals next week, he said, but the sale ticket size will be lower.
Echoing a similar view, All India Gems and Jewellery Trade Federation (GJF) Chairman Nitin Khandelwal said there has been some relief for the maker players due to the government decision on the PMLA.
However, due to less currency in the market the overall sentiment is dull, he said.
"The momentum has started, but it is yet to pick up. There is less currency circulating in the market as an aftereffect of demonetisation announced last year. Because of this, there have been less buyers this year during Dhanteras and Diwali," he added.
The business this year is expected to be at par with last year or could even be lower, Khandelwal said.
"To encourage people to buy jewellery during the festivals, the market is full of free offers and discounts.
Jewellers are try their best to increase footfalls and create positive sentiment in the market," he added.
Mostly people will go for light weight or essential jewellery, he said.
World Gold Council Managing Director, India, Somasundaram PR said the industry is bracing for the festive season and the trend is looking better than the first half.
"However, the sentiment is not at its full potential. After GST was implemented (in July) it brought in its own share of challenges, which will be there for some time," he added.
GST was not adopted properly and putting gold and silver imports from South Korea in restricted list also caused disruptions in the market, Somasundaram said.
"However, I would say demand will still go up and touch the level achieved last year," he added.
In a relief to the industry, the government has removed gems and jewellery dealers from the purview of the reporting requirement under the PMLA.
Early this month, the government rolled back August 23 notification that notified dealers in precious metals, precious stones and other high value goods as persons carrying on designated business and professions under the Act.
Also, this will be the first Diwali after the November 8, 2016 note-ban announcement.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)