India’s gems and jewellery export sector—which is one of the largest in the world—contributed ~27% to the global jewellery consumption in 2019. Market size of the global gems and jewellery sector is likely to expand to US$ 103.06 billion between 2019 and 2023. India’s gems and jewellery exports are expected to reach US$ 100 billion by 2025. Globally, India was the top exporter of diamonds with a share of 20.6% in 2020.
The Government of India is aiming at US$ 70 billion in jewellery export in the next five years (until 2025), up from US$ 35 billion in 2020. In FY21, gems & jewellery exports in India stood at US$ 25.30 billion.
In FY22 (until September), India exported gems & jewellery worth US$ 18.98 billion compared with US$ 8.01 billion in FY21 (until September).
In September 2021, India exported gems & jewellery worth US$ 3.16 billion compared with US$ 2.4 billion in September 2020.
In August 2021, the GJEPC announced an ambitious target of raising exports of the sector to US$ 44 billion in FY22.
In FY21, cut and polished diamonds accounted for 67.75% of the total gems & jewellery exports.
In FY22 (until September 2021), cut and polished diamonds accounted for the highest share (65.17%), followed by gold jewellery (8.270%) and silver jewellery (6.74%).
In September 2021, the total gold jewellery exports stood at US$ 768.96 million.
Growth in exports is mainly due to revived import demand in the export market of the US and fulfilment of orders received by numerous Indian exhibitors during the Virtual Buyer-Seller Meets (VBSMs) conducted by GJEPC. In August 2021, the GJEPC announced a target of raising exports of the sector to US$ 44 billion in FY22.
According to Gem and Jewellery Export Promotion Council, between April 2020 and December 2020, gold bars accounted for ~6.8% (US$ 678.77 million) and gold jewellery at ~1.8% (US$ 181.49 million) of the total gems and jewellery imports in India. As per the World Gold Council (WGC), India’s gold demand stood at 446.4 tonnes in 2020. In India, gold demand in terms of volume increased by 37% YoY to 140 tonnes and in value terms, the demand increased by 57% YoY to Rs. 58,800 crore (US$ 7.9 billion) in the first quarter of 2021, according to the World Gold Council. In the second quarter of 2021, gold demand in terms of volume increased by 19% YoY to 76 tonnes and in value terms, the demand increased by 23% YoY to Rs. 32,180 crore (US$ 7.9 billion).
The second quarter of 2021 has been better for businesses as establishments were better prepared for lockdowns compared with 2020. Total jewellery demand in terms of volume increased by 25% YoY to 55 tonnes in the second quarter of 2021.
India has 10 special economic zones (SEZ) for gems & jewellery. These zones have more than 500 manufacturing units, which contribute 30% to the country’s total exports.
The Government has permitted 100% FDI in the sector under the automatic route, wherein the foreign investor or the Indian company do not require any prior approval from the Reserve Bank or Government of India. The Government has made hallmarking mandatory for gold jewellery and artefacts and a period of one year is provided for its implementation.
As per Union Budget 2021, the Gem and Jewellery Export Promotion Council has proposed a reduction in import duty on cut and polished diamonds to 2.5%, from the existing 7.5%, in order to double exports of gems & jewellery to US$ 70 billion by 2025.
Cumulative FDI inflows in diamond and gold ornaments in India stood at US$ 1,194.00 million between April 2000 and June 2021 according to Department for Promotion of Industry and Internal Trade (DPIIT).
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