Advantage India
Growing
Demand
* Gold ETF AUM rose from 40 tonnes to 54 tonnes in 2024, signaling increasing retail investor participation.
* Investment demand grew 14% YoY, reaching 76 tonnes in Q4 CY24, even as jewellery demand softened.
* In 2022, India ranks first among the top exporters in cut & polished diamonds, and second in gold jewellery, silver jewellery and lab-grown diamonds.
Increasing
Investments
* RBI’s gold purchases surged from 16 tonnes in 2023 to 73 tonnes in 2024, reinforcing confidence in gold reserves.
* Lighthouse, a private equity platform, has made a significant investment of Rs. 284 crore (US$ 34.2 million) in Kushal's, a brand specializing in fashion and silver jewelry.
* In September 2023, Malabar Gold & Diamonds announced to invest Rs. 1,000 crore (US$ 120.4 million) by FY25, the company announced generating 4,000 jobs in Maharashtra.
*Cumulative FDI inflows in diamond and gold ornaments in India stood at Rs. 8,905.18 crore (US$ 1,427.39 million) between April December 2024.
Policy
Support
* The Government has permitted 100% FDI under the automatic route** in this sector.
* The sector now has AEO status from the finance ministry, easing export-import processes with quicker cargo release, 50% lower bank guarantees.
* The Government has reduced custom duty on cut and polished diamond and coloured gemstones from 7.5% to 5% and NIL.
* India has signed an FTA with UAE which will further boost exports and is expected to reach the target of US$ 52 billion.
* India has signed Economic Cooperation and Trade Agreement (ECTA) with Australia.
*The India-UK Free Trade Agreement is expected to more than double India's gems and jewellery exports to the UK, reaching Rs. 21,183 crore (US$ 2.5 billion) within the next two years.
Attractive
Opportunities
*India’s gold demand in 2025 is projected to remain robust, ranging between 700-800 tonnes despite a 31 per cent increase value-wise in 2024 -- World Gold Council.
*India’s gold demand witness a 774.1 tonnes in 2023.
*The gems and jewellery sector represents 0.2% of the total equity inflow for FDI from April 2000 to December 2024.
Introduction
India’s gold and diamond trade contributed ~7% to India’s Gross Domestic Product (GDP). The Gems & Jewellery sector has employs ~5 million. Based on its potential for growth and value addition, the Government declared the Gems & Jewellery sector as a focus area for export promotion.
The Government has undertaken various measures recently to promote investment and upgrade technology and skills to promote ‘Brand India’ in the international market. 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 the Government of India. The Indian Government also signed a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates (UAE) in March 2022, this will allow the Indian Gems & Jewellery industry to further boost exports. CEPA will provide the industry with duty-free access to the UAE market. India’s Gems Jewellery Export Promotion Council (GJEPC) aims to triple its exports to the UAE post the CEPA.
Market Size
India’s Gems & Jewellery market size was at US$ 78.50 billion in FY21. Growth in exports is mainly due to revived import demand in the export market of the US and the fulfilment of orders received by numerous Indian exhibitors during the Virtual Buyer-Seller Meets (VBSMs) conducted by GJEPC.
In FY25, India's Gems & Jewellery exports stood at Rs. 2,43,162 crore (US$ 28.50 billion). In March 2025, India's Gems & Jewellery exports stood at Rs. 2,20,379 crore (US$ 25.82 billion).
Investments/Developments
Cumulative FDI inflows in diamond and gold ornaments in India stood at Rs. 8,905.18 crore (US$ 1,427.39 million) between April-December 2024.
Some of the key developments in this industry are listed below:
- The India-UK Free Trade Agreement is expected to more than double India's Gems & Jewellery exports to the UK, reaching Rs. 21,183 crore (US$ 2.5 billion) within the next two years.
- In June 2024, Union Minister of Commerce and Industry Mr. Piyush Goyal commends Bharat Ratnam - Mega CFC, a project by the Gem & Jewellery Export Promotion Council (GJEPC) and SEEPZ, for enhancing the Aatmanirbhar Bharat vision.
- In January 2024, Prime Minister Mr. Narendra Modi inaugurated the commencement of the Bharat Ratnam Mega CFC at the SEEPZ SEZ in Mumbai in virtual mode (remotely). Bharat Ratnam Mega CFC is a Socio-economic project promoted by the Ministry of Commerce and Industry, GJEPC India and SEEPZ SEZ authority to drive exports from the country. This project aims at creating a world-class infrastructure for promoting the inherent skills of the Gems & Jewellery manufacturing industry. The Mega Common Facilitation Centre provides a supportive and collaborative environment for entrepreneurs, MSMEs and small businesses to grow and thrive.
- In September 2023, The Gem & Jewellery Export Promotion Council (GJEPC) has achieved a significant milestone by facilitating India’s first jewellery exports through courier mode from Mumbai. This development represents a significant leap forward in simplifying international trade.
- In April 2023, The Gem & Jewellery Export Promotion Council (GJEPC) commences the first-ever Lab-grown Diamond Buyer Seller Meet (BSM) in Surat. The event was inaugurated by Mr. Virendra Singh, ITS, Development Commissioner & Additional DGFT; Mr. Kirit Bhansali, Vice Chairman, GJEPC; Mr. Vijay Mangukiya, Regional Chairman, Gujarat; Mr. Smit Patel, Convener, Lab-grown diamonds committee, GJEPC; Mr. Sabyasachi Ray, ED, GJEPC along with others.
Government Initiatives
- Under Union Budget 2025-26, the customs tariff on jewellery (HSN code 7113) was reduced from 25% to 20% and on platinum findings from 25% to 5%, making jewellery more affordable and boosting domestic demand.
- In the Union Budget 2024, the government proposed reduction in the basic customs duty on gold and silver to 6% and on platinum to 6.4%.
- The sector now has AEO status from the finance ministry, easing export-import processes with quicker cargo release, 50% lower bank guarantees.
- The Indian government accepted the recommendation of GJEPC to promote indigenous manufacturing in the emerging Lab-grown diamond sector by providing research grants to the Indian Institute of Technology (IIT) for five years.
- India has signed an FTA with the UAE which will further boost exports and is expected to reach the target of US$ 52 billion.
- The Government has reduced custom duty on cut and polished diamond and colored gemstones from 7.5% to 5% and NIL.
- Revised SEZ Act is also expected to boost Gems & Jewellery exports.
Road Ahead
In the coming years, growth in the Gems & Jewellery sector would largely be contributed by the development of large retailers/brands. Established brands are guiding the organised market and are opening opportunities to grow. Increasing penetration of organised players provides variety in terms of products and designs. Also, the relaxation of restrictions on gold import is likely to provide a fillip to the industry.
The improvement in availability along with the reintroduction of low-cost gold metal loans and likely stabilisation of gold prices at lower levels is also expected to drive volume growth for jewellers over the short to medium term. India has 450 organised jewellery manufacturers, importers & exporters and is the hub for jewellery manufacturing. These players have benefited greatly due to the increasing liberal policies by the government. The demand for jewellery is expected to be significantly supported by the recent positive developments in the industry. India’s Gems & Jewellery industry is expected to reach US$ 100 billion by 2027.
References: Media Reports, Press Releases, Reserve Bank of India, Gem & Jewellery Export Promotion Council
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