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 October 2020, the first edition of IIJS Virtual* recorded >10,000 visitors and a business turnover of ~ Rs. 1,000 crore (US$ 137.31 million).
* 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. 8,020.38 crore (US$ 1,322.24 million) between April 2000-September 2024, according to the Department for Promotion of Industry and Internal Trade (DPIIT).
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 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 revised SEZ Act is also expected to boost gems and jewellery exports.
* 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.
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 0.19% of the total equity inflow for FDI from April 2000 to December 2024.
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