Dubai jewellery group Damas International Ltd and India's Gitanjali Gems Ltd plan to open up to 60 stores by 2014 to tap into rising jewel demand in India.

Nasdaq Dubai-listed Damas said in a regulatory filing it won approval to set up a joint venture with diamond and jewellery maker Gitanjali to trade jewelleries and related accessories. The partnership will see Damas opening 50 to 60 retail outlets over the next three to five years.

India is really a potential market, where the gems and jewellery market growth is 25 to 30 percent a year.The companies will jointly invest up to 3.5 billion Indian rupees ($72.72 million), the minimum requirement by the Indian government. The establishment of the company, in which Damas will hold a 51 percent stake, will be finalised soon. 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.

DAMAS RETAIL EXPANSION: Dubai has in recent years joined the club of major gold trading centres such as London, New York and Hong Kong, thanks to proximity to the world's biggest gold consumer, India, and an aggressive drive to become a regional commodities hub.

Family-controlled Damas - the first retail company to list on the Nasdaq Dubai in July -- operates in about 18 countries.

Dubai has the highest concentration of jewellery shops in the world, generating trade worth $35 billion in 2007 -- 20 percent of the $173 billion total global jewellery trade.

Sales volumes at Damas fell 11 percent in the first quarter, compared to the same period last year.The drop in sales was attributed to a fall in consumer spending on gold, due to high prices in the period. Despite Damas' sales drop, its performance was better than the overall Dubai market, which saw a sharp decline of 40 to 60 percent in gold sales in the first quarter, versus volumes between October through December.