India’s gems and jewellery exports experienced a decline of 13.44% in June, reaching Rs 15,939.77 crore ($1,909.57 million), as reported by the Gem and Jewellery Export Promotion Council (GJEPC). This decrease from Rs 18,413.88 crore ($2,240.77 million) in the same period last year is attributed to muted demand in international markets.
Impact of Geopolitical Tensions
The former GJEPC chairman and Managing Director of Kama Jewelry, Colin Shah, highlighted the significant impact of prolonged geopolitical tensions on the industry. “This decline in gems and jewellery exports is owing to the prolonged geopolitical tensions leading to economic uncertainty in the global markets, which has pushed the demand southwards in the overseas markets,” said Shah. These tensions have resulted in economic uncertainty, dampening consumer demand in key international markets.
Cut and Polished Diamonds See Major Drop
One of the most affected segments was cut and polished diamonds, which saw a decline of 25.17% in June. Exports fell to Rs 8,496.87 crore ($1,017.87 million) from Rs 11,354.67 crore ($1,382.13 million) in June 2023. Shah attributed this drop primarily to weak demand from major markets, particularly China, which accounts for about one-third of India’s cut and polished diamond exports.
Gold Jewellery Exports Rise
In contrast to the overall downward trend, gold jewellery exports increased by 7.97%, reaching Rs 5,074.27 crore ($608.01 million) compared to Rs 4,699.56 crore ($571.63 million) during the same period last year. Shah noted, “The uptick in exports of gold jewellery was following the robust demand in the global market as prices are currently less volatile, which has encouraged consumers to make the most out of this situation and purchase the yellow metal as an investment avenue as well as for wearable purpose.”
Industry Implications
The decline in overall gems and jewellery exports highlights the industry’s vulnerability to global economic conditions and geopolitical developments. Jewellers must navigate these challenges by diversifying their markets and enhancing their value proposition to maintain competitiveness. The increase in gold jewellery exports suggests a potential area for growth, driven by stable prices and consumer interest in gold as both an investment and wearable item.
