Investor Centre Market Information
Market Information
Industry Type

Gems and Jewellery

Industry Specifics:

The Indian Gems and Jewellery Industry is one of the largest in the world in terms of its commercial contribution to the global diamond and jewellery sectors. It promotes the world’s largest centre for cut and polished diamonds and accounts for almost 80% of the value of polished production in 2020. India being the second largest consumer of gold in the world, the industry contributed around 20% to the estimated global jewellery consumption of USD 231 bn in 2020.

The industry is also a significant contributor to India’s economy; home to more than 300,000 players and with a workforce of more than 4.64 mn, it contributes nearly 7% to India’s GDP and over 14% to the country’s merchandise exports.  

The Indian Gems and Jewellery Industry is characterized by India’s rich heritage in jewellery-making, talented artisans and low costs of production, and this has made India one of the most sought after sourcing destinations for gems and jewellery by the top global brands. 

Recognizing the potential of the industry in terms of growth and value addition, the Government of India has undertaken various measures with regards to subsidies and investments to promote ‘Brand India’ in the international market.

Industry Size:

The Indian Gems and Jewellery Industry has been facing rough headwinds since the last few years. The Covid-19 pandemic further dimmed the prospects of the industry, which was already facing challenges with the slowdown in the global economy.

During FY21, India’s gross exports of gems and jewellery stood at USD 25.30 bn, as compared to USD 36 bn in the previous year, witnessing a decline of 30%. Exports of cut and polished diamonds recorded a decline of 12% to USD 16.4 bn from USD 18.7 bn in the previous year. Gold jewellery exports recorded a decline of 58% at USD 5 bn as compared to USD 11.9 bn in the previous year.

India's top three export destinations for gems and jewellery are - the US with 40% share, followed by Hong Kong with 37% share and UAE with 14% share.

Retail sales of diamond jewellery stood at USD 4.02 bn in 2020, a fall of 21.6% from USD 5.13 bn in the previous year. India contributes around 6% to global diamond jewellery demand which was estimated as USD 68 bn in 2020.

Prospects of the Industry:

While retail consultancy firms were betting on FY21 to be the year of revival, the second Covid wave in India led to partial lockdowns and disruption of business all over again. However, people have emerged from this crisis with new ways of connecting and conducting business. With increasing number of fully-vaccinated populace, demand for jewellery is expected to bounce back as the shopping patterns and festivities gradually return to normal.

The various measures being undertaken by GJEPC are also contributing to the revival of the Gems and Jewellery Industry. GJEPC has proposed a reduction in import duty on cut and polished diamonds to 2.5% from the existing 7.5% in order to accelerate exports of gems & jewellery to USD 70 bn by 2025. This provision would give a much-needed boost to the sector and help it to move to the next level in the coming years.

Retailers are relying less on ‘Special Occasion’ purchases as jewellery consumers of all genders are veering towards self-purchase of jewellery for daily-wear occasions. Gen Z is particularly resistant to classifications or labels. This non-conforming mindset will offer brands the opportunity to expand their product line to cater to individualistic preferences and special days. 

Consumer sentiments are buoyant and it is expected that the oncoming festive season will accelerate the growth of jewellery to pre-Covid numbers. There is an emerging trend for lightweight bridal jewellery sets and this will rule the oncoming wedding season. 

The quick rise in use of digital technology will continue to play a significant role. E-commerce portals and social media platforms will be widely used to research and identity preferred jewellery designs, with only the final purchase being carried out in a physical store. To improve consumer convenience, many retailers are upgrading their e-commerce operations and planning to introduce virtual reality experience for their customers.

The Covid-19 crisis has made the Indian Gems and Jewellery Industry stronger like never before. The industry is all geared up and confident that it will soon be on par with its pre-Covid level in value terms.