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Market Information
Industry Type

Gems & Jewellery

Industry Specifics

The Indian Gems and Jewellery Industry plays an important role in Indian economy, contributing about 6-7% to GDP and providing employment to nearly 3.5 mn people. The industry is largely export-oriented and accounts for nearly 15% of the country’s export and foreign exchange earnings. Majority of the export revenues, approximately 50 - 60%, come from exports of cut and polished diamonds followed by gold and diamond jewellery.

India is the world's largest diamond cutting and polishing centre owing to its low-cost advantage, high precision and quick turnaround. It accounts for 85% of the global cut and polished production in caratage.

The domestic market is primarily dominated by gold jewellery (includes Polki and Kundan) accounting for 80% of market share followed by diamond and platinum jewellery with 20% share.

Industry size

The year 2015-16 was a difficult one for the industry. The country's overall gems and jewellery exports declined 3.46% from USD 39.98 bn in 2014-15 to USD 38.59 bn in 2015-16. This drop in the performance was due to various factors like global economic slowdown, weak demand, high rough diamond prices and shutdown of local jewellery market for more than a month in opposition of levy of excise duties.

The exports of cut and polished diamonds fell by 13.66% from USD 23.16 bn in 2014-15 to USD 19.99 bn in 2015-16, whereas gold jewellery too saw a drop by 13.07% from USD 9.9 bn in 2014-15 to USD 8.6 bn in 2015-16.

Major export locations were UAE, Hong Kong and USA with 32%, 28% and 22% share of the gross gems and jewellery export in 2015-16. Whilst UAE and USA showed an upward trend, exports to Hong Kong in 2015-16 showed a dip from 31% in 2014-15, indicating slowdown in China/ Hong Kong market.

The size of the domestic jewellery market was estimated to be around USD 46 bn at retail value in 2015. Diamond jewellery revenue fell 9% in 2015 to USD 3.6 bn from USD 4 bn the previous year. In rupee term, it dropped by a lower 4%.

Prospects of the Industry

After yet another challenging year, there are encouraging signs indicating improvement in global economic environment.

The outlook for Indian Gems & Jewellery Industry is positive driven by strong domestic demand, though the market for cut & polished diamonds would continue to witness volatility for some time. A significant proportion of the domestic growth is expected to come from the organised retail sector.

Over the next decade, there are likely to be 15 million weddings per year in India and as weddings generate approximately 50 per cent of annual gold jewellery demand, the domestic market is expected to grow to reach approximately USD 60 bn by 2018.

Due to rapid urbanisation and exposure to international fashion trends, there is an increased preference towards diamond jewellery for other love-based occasions apart from engagements and weddings, including anniversaries and Valentine’s Day. This is clearly reflected in the increasing demand for Solitaires which is predicted to grow further in the coming years. Diamond jewellery is also making its mark in the fashion space with increasing number of brands launching contemporary lightweight jewellery targeting working women.

To sustain the sheen of diamonds amongst the new generation of consumers, GJEPC has collaborated with leading miner De Beers to launch a joint programme of ‘Generic Diamond Promotion’ in India.

To retain consumer confidence in diamonds, joint efforts by various industry bodies and the trade are well under way to counter the growing threat of synthetic diamonds. While still a small fraction of the market, synthetic gems could account for nearly one-tenth of rough-diamond sales within five years, according to Morgan Stanley estimates. To address the concern of lab-grown diamonds getting into the natural diamonds supply chain, De Beers has started marketing a new, low-priced detector that quickly screens tiny synthetic diamonds.

The Industry is also working with the Government to realise the dream to ‘Make India’ an International Diamond Trading Hub. By attracting International manufacturing business to India (diamantaires from Belgium, Israel and Dubai), it can tap additional market share of approximately USD 20 bn by FY 2018-19.