DUBAI (CommodityOnline): Dubai jewellery group Damas International Ltd and India's Gitanjali Gems Ltd have joined hands to form a joint venture to launch upto 60 stores by 2014 to tap into rising jewellery demand in India.

Damas has won approval to set up a joint venture with diamond and jewellery maker Gitanjali to trade jewellery and related accessories.

The partnership will see Damas opening 50 to 60 retail outlets over the next three to five years, according to Prodyut Banerjee, Damas' corporate finance department." India is really a potential market, where the gems and jewellery market growth is 25 to 30 percent a year," Banerjee said.

The companies will jointly invest up to 3.5 billion Indian rupees ($72.72 million), the minimum requirement by the Indian government, he said.

According to company details, Gitanjali Lifestyle, a wholly owned subsidiary of Gitanjali Gems will set up a joint venture company (JVC) in India in association with Damas LLC, Dubai for retail trading of all kinds of jewellery and related accessories in India.

The foreign collaborator, Damas LLC, has received necessary approvals from the Foreign Investment Promotion Board (FIPB) for setting up the JVC in India.

Damas’ first created a joint venture with Gitanjali in 2005 for a series of franchise stores under the D’damas brand largely stocked with Gitanjali products. Through the franchising deal, under which the Indian retailer holds 515, there are about 250 D’damas franchisees throughout India.

India's gem and jewellery industry has sought additional dollar financing from the country's foreign exchange reserves to inject liquidity into the sector in June.