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Market Information
Industry Type

Gems and Jewellery

Industry Specifics

India has become an undisputed world leader in the cut and polished diamond market, polishing nearly one billion stones each year. This USD 41 bn industry with a workforce of more than five mn, contributes nearly 7% to India’s GDP and over 15% to the country’s merchandise exports.

Home to more than 300,000 players, with the majority being small players, India is the second largest consumer of gold accounting for over a fifth of world jewellery fabrication and is one of the most reliable drivers of global demand for gold. 

India today has become one of the most sought after sourcing destinations for gems and jewellery for the global market.  Based on its potential for growth, the Government of India has declared the Gems and Jewellery sector as a focus area for export promotion and has recently undertaken various measures to promote investments and to upgrade technology and skills.

Industry Size:

FY 2017-18 started on a positive note with growing exports and the introduction of GST. However, the Gems and Jewellery sector was adversely affected towards the end due to various unexpected developments within the industry. 

During the year, the industry witnessed a decline of 5.07%, with total gross exports, recorded at USD 40.97 bn as compared to USD 43.16 bn in the previous year.

The cut and polished diamond segment, however, grew 4.17% to USD 23.73 bn as against USD 22.78 bn registered the previous fiscal year. Gold jewellery exports grew 10.89% to USD 9.67 bn as against USD 8.72 bn the previous year.

Major export destinations for the Gems and Jewellery sector in 2017-18 were Hong Kong with 33%, followed by the UAE with 25% and the USA at 23%.

India is set to become the second largest jewellery market, with sales having crossed USD 60 bn in 2018. The major contributor to this sales value is gold jewellery. The diamond consumer market in India is still under-developed with only 7% of world consumption in value.

Prospects of the Industry:

With the focus on increasing demand for 'India Made' jewellery products in the established markets like the US, Hong Kong and China as well as in potential new markets like Iran, Jordan, Turkey, Latin America, Russia and the South East Asia,  GJEPC plans to invest substantially in infrastructure to develop and support jewellery trade.

GJEPC is planning to set up a jewellery park with all modern facilities in Mumbai, to encourage the local handmade Jewellery workers and factories in local Zaveri Bazaars and other clusters in the state to relocate themselves to such parks to develop the trade.  It is expected to generate direct employment for around 100,000 workers in the State of Maharashtra.

GJEPC also has plans to set up Common Facility Centres (CFCs) in 13 identified clusters in India, to increase productivity and quality of small and medium manufacturers and Karigars who cannot afford to buy high tech machines for manufacturing of jewellery.

The changing face of the modern consumer will drive not only the evolution of the product category and designs but also the contact points for sale. 

Millennials and post-millennials now dominate the majority of the market. As such, the jewellery industry is shaping itself up to cater to their specific demands. For Indian millennials, heavy jewellery sets are a definite no-no. Jewellery is competing with other expenses like vacations, gadgets and other trappings of wealthier lifestyle. The competition is forcing jewellers to adapt, via more modern lightweight designs, online presence, and promotional offers that seem more akin to clothing or white goods retailers. Personalization, experience and ethics are key to marketing to the millennials.

As jewellery moves into the space of daily-wear fashion accessory and price range moves in the affordable bracket, consumers are more receptive to buying jewellery online. In urban India, 40% of consumers claimed that they browsed online before purchasing their jewellery. Since jewellery is a tactile category, the communion of physical jewellery outlets and online portals is expected to drive the business model for the next few years. The USD 135 mn online jewellery segment in India is expected to hit USD 2 bn in value by 2022.

The organized trade, growing at approximately 11% CAGR, will corner 42% of the market by FY23 (v/s approximately 30% currently). This clear shift of business towards the organized trade will be underpinned by their aggressive expansion drive, the design might an increasingly competitive pricing vis-à-vis family jewellers.

Addressing more critical industry issues, with conflict gemstones and minerals in the limelight as of recent times, the future will mandate higher transparency and ethics in business dealings. De Beers is one among a handful of companies trying to increase consumer confidence by making the supply chain more efficient and secure using blockchain technology. Blockchain technology will help modernize the diamond industry by making it more secure, transparent, allowing smoother access between diamond buyers and sellers.