Last week marked firsts for Russia's jewlery industry. A modern piece of jewelry will grace the Kremlin Diamond Chamber for the first time, following Russia's first national contest sponsored by the Russian State Treasury, or Gokhran.

The final leg of the competition was held Tuesday and featured the work of nine semi-finalists from throughout the Russian Federation.

The winning design is an Easter egg in the tradition of Faberge, dubbed "300 Years of the Russian Navy," which will be on display in the Kremlin Diamond Chamber beginning January.

"We are happy that the contest was held," said Galina Ananova, chairwoman of the Russian Jewelers Association, and a member of the Ananovi dynasty known for bringing international attention to the world of Faberge.

"We have had the opportunity to demonstrate our achievements and attract more attention to the industry and its problems," she said.

About 10 percent of the 100 to 120 tons of gold produced in Russia annually is processed by the jewelry industry, though a large part of the jewelry market here is dominated by imports from Turkey, Italy, France and the Middle East, Ananova said.

"In the present situation ... it is difficult for domestic jewelry factories to develop," she said.

That perception is what led the Russian State Treasury to sponsor the contest, which will now be held annually, said former Gokhran director German Kuznetsov.

"The recognition received by Russia's jewelers is an important factor to stimulate the further development of the industry and provide the jewelry vaults with masterfully made things," he said.

Indeed, Russia's royal rulers once commissioned copious amounts of bejeweled decorations and gifts, many of which now fill the country's major museums. Now, that lavishness has all but dried up, leaving jewelers to complain that their art is dying.

"It is significant that the contest's organizer was not the Hermitage and not the Diamond Fund, but Gokhran," said Vera Chernova, the chief artist at St. Petersburg jeweler Russian Gems.

By rewarding creativity, the contests could be a boost to the mass-market jewelry industry as well, in promoting new developments in design and technology, jewelers said.

"It is natural that domestic jewelry factories should seek to expand their assortment, which at this point is almost limited to formal wedding rings, uninventive earrings and ponderous and outdated items," said a spokesman for the Russian Jewelers Association.

"Contests of this kind will stimulate our jewelry manufacturers into flexibility and versatility, and they will produce more items matching modern trends."

In addition, the government has taken more concrete steps to help the industry. Most notably, State Duma (lower house of parliament) deputies slashed a proposed 15 percent hike in jewelry excise taxes to 5 percent.