For the financial year 2023-24, the jewellery export sector in India reported significant figures, particularly in the domain of plain gold jewellery, which saw a notable increase.
The export of plain gold jewellery surged by 61.72% to reach US$ 6,792.24 million, up from US$ 4,199.96 million in the previous fiscal year.
The gold sector’s performance starkly contrasts the broader trends observed in the gems and jewellery export industry, which faced several challenges over the same period.
Detailed Sector Performance
Gold Jewellery Trends
- The combined exports of plain and studded gold jewellery rose by 16.75%, totalling US$ 11,230.18 million. This growth is notable considering the sector’s earlier decline of 10.47% between April and September 2023. However, a strong rebound occurred in the latter half of the year, with a growth of 46.91%.
Strategic Markets
- The United Arab Emirates (UAE) and Bahrain emerged as pivotal markets, with UAE imports alone growing by 107.2% to US$ 4,528.66 million. These two markets collectively accounted for over 85% of India’s plain gold jewellery exports. Australian markets also saw a 37% increase, benefiting from the recent India-Australia Economic Cooperation and Trade Agreement (ECTA).
Coloured Gemstones and Other Metals
- Coloured gemstones exports grew by 14%, reaching US$ 478.71 million. Meanwhile, platinum jewellery exports experienced the most dramatic increase, up by 449.16% to US$ 163.48 million, suggesting a growing diversification in consumer preferences or strategic market entries.
Challenges in the Diamond Sector
- The cut and polished diamond sector faced a decline, with exports falling by 27.58% to US$ 15,967.02 million. This sector’s downturn was mitigated slightly by a voluntary halt on natural rough diamond imports, which helped to correct demand-supply imbalances and stabilise prices.
Industry Implications and Strategic Adjustments
Trade Agreements and Policy Impact
Vipul Shah, Chairman of the Gem & Jewellery Export Promotion Council (GJEPC), attributed the growth in plain gold jewellery exports to pragmatic foreign trade agreements, particularly highlighting the timely implementation of the India-UAE Comprehensive Economic Partnership Agreement (CEPA). Shah commented, “The increase in plain gold jewellery exports may be attributed to the pragmatic foreign trade agreements by the Govt. The implementation of India-UAE CEPA couldn’t have come at a better time, especially when the industry faced various challenges with economic downturns in major export markets and escalating geopolitical concerns, all of which led to the decline in demand.”
He added, “GJEPC has been actively working with the Government to implement favourable policies in the forthcoming trade agreements, notably those with GCC, Canada, UK, and EU. I am confident that this proactive engagement will have a positive impact on the exports of gem and jewellery to these nations in the coming months.”
Shah further remarked on the overall challenges faced by the export sector last year, stating, “The year was a challenging year for exports, owing to the high interest costs, inflation and slackening of market demand in the USA and lower growth in China after Covid hit the gem & jewellery industry hard in the first half of the year. Also, the Ukraine war and uncertainty on import of rough diamonds from Russia worsened the scenario.”
Future Initiatives and Outlook
Shah highlighted the ongoing efforts to tap new markets: “With the objective to tap and penetrate new markets, GJEPC made concerted efforts to explore new markets through delegations to Vietnam, Cambodia etc and now a delegation to Latin American countries is planned in May to give fillip to exports.”
He also discussed the impact of the sector’s strategic decisions on diamond exports, noting, “The diamond industry’s decision to voluntarily halt natural rough diamond imports from October 15th to December 15th, 2023, helped address demand-supply imbalances and resulted in a positive impact on the prices of polished diamonds as we entered the Q4 of the financial year.”
