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 75% export of the world’s polished diamonds. India being the second largest consumer of gold in the world, the industry contributes around 29% to the global jewellery consumption.

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 15% to the country’s merchandise exports.  

The Indian Gems and Jewellery Industry is characterized by its talented labour 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, 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 FY20, India’s gross exports of gems and jewellery stood at USD 36 bn, as compared to USD 40 bn in the previous year, witnessing a decline of 10%. Exports of cut and polished diamonds recorded a decline of 22% to USD 18.7 bn from USD 23.8 bn in the previous year. Gold jewellery exports registered a moderate growth of 1.8%, recorded at USD 11.9 bn as compared to USD 11.78 bn in the previous year.

India’s top three export destinations for gems and jewellery remain the same as last year; Hong Kong and UAE with 27% share each, and USA with 26% share.

India’s domestic jewellery market was predicted to grow at a CAGR of 5.6% to reach USD 100 bn by 2025. However, the growth will now be dictated by how quickly the market recovers from the Covid-19 depression.  GJEPC predicts that the market will continue to bear a loss in the coming year.

Prospects of the Industry:

The Gem and Jewellery Industry has been recording declining trends since the beginning of FY20. Challenges for the sector have escalated due to the outbreak of Covid-19, resulting in stalled manufacturing and commercial activities..

To address the situation and maintain stability, GJEPC has initiated proactive steps like setting up of a Rs. 50 cr corpus from its own reserves, liaising with different trade bodies across the world and industry apex organizations such as World Federation of Diamond Bourses (WFDB) and World Gold Council (WGC) on steps that can be taken to ensure that supply and demand equilibrium and price stability is maintained during the difficult period that the industry is facing.

The Gems and Jewellery Industry has also requested the government to increase the subvention rate from 5% to 7%, to protect the trade and forex earnings of the country and for the business fraternity to be competitive against other suppliers in the international market. 

As everyone is gearing up for the post-Covid world, the upcoming wedding season is the perfect opportunity for the industry to get back to their business. With most of the weddings planned in Q1/Q2 having been deferred to Q3/Q4, there could be a rise in demand for jewellery. As the grandeur of weddings in terms of destination and scale will be more subdued, it is anticipated that brides of 2020-21 will invest more in jewellery. 

But, at the same time, it is expected that the customer demand will move from heavy jewellery buying to more minimalistic spends during occasional and festive purchases. We will see a shift towards searching and shopping for jewellery in a more conscious way and technology will play a significant role in this process. Many players are upgrading their e-commerce operations and planning to introduce virtual reality experience for their customers.

The Indian Gems and Jewellery Industry has come out of every crisis more resilient, but this time it will take much longer to find the new normal, which could be about 20-30% below the pre-Covid level in value terms. While the industry is staring at major losses this year, the need of the hour is sustainability in the long run, driven by a well-laid-out plan.