New Delhi: India is losing ground in the global gems and jewellery market, with its export share nearly halving over the past decade, according to the NITI Aayog Q3 FY2025-26 quarterly trade watch report, released Monday. The report flagged structural weaknesses in the sector.
Between 2015 and 2024, India’s share in the global gems and jewellery trade dropped from 6.1 percent to 2.9 percent, if raw gold is included, and from 12 percent to 7.8 percent, if it is excluded.
“This decline has been driven primarily by a sharp fall in India’s exports of diamonds, along with a reduction in share across most product categories, barring two segments that have recorded only marginal gains of around 0.2–1.2 percent,” the report stated.
In 2024, the gems and jewellery market was globally valued at $1.05 trillion, including raw and semi-processed gold, accounting for 4.3 percent of total global merchandise trade.
Meanwhile, India’s share in global gems and jewellery exports was 2.9 percent, including raw gold. Excluding raw gold, the share rose to 7.8 percent.
The report attributed the gap to the dominance of raw gold and semi-processed gold powder, which, combined, were valued at $673.4 billion and accounted for 64 percent of the 2024 global demand. India had a negligible presence in this segment, with a 0.1 percent share in raw gold exports.
“The sector commands a global market size of $378.1 bn excluding raw gold (HS 7108) in 2024. India’s exports are valued at $29.5 bn, translating to a share of 7.8 percent in 2024, led by precious metal jewellery and unworked and unmounted diamonds,” the report stated.
The report excluded raw gold (HS 7108) from parts of its analysis, as it “does not capture high value-added segments appropriately”.
Excluding raw gold, India was a major exporter of precious metal jewellery and diamonds in 2024, accounting for a 13 percent share of global exports worth $26.7 billion.
Exports in other product categories, however, remained limited at $2.8 billion, translating to only a two percent share, highlighting a high degree of concentration.
India also dominated the global cut and polished diamonds segment. The market was valued at $57.6 billion in 2024, with India accounting for 24 percent of exports, worth $13.7 billion.
However, exports, by destination, remained mostly unchanged. Over the past decade, nearly 90 percent of India’s jewellery exports have been reaching five major markets: the United Arab Emirates, the United States, Hong Kong, Singapore, and the United Kingdom.
Despite the decline in global share, the sector remains significant for the domestic economy.
The sector, in 2022-23, accounted for nearly 2.2 percent of India’s total manufacturing output, seven percent of the country’s GDP, and employed approximately 50 lakh workers.
Challenges
The report highlighted the structural constraints that continued to weigh on the sector’s competitiveness.
A key issue, as noted in the NITI Aayog report, was the fragmented and largely unorganised nature of the industry, which is dominated by micro, small and medium enterprises (MSMEs). The same limits economies of scale, formalisation, and productivity gains.
Access to finance also remained a major bottleneck. “Collateral requirements, lenders’ risk perceptions, and low penetration of credit guarantee schemes constrain credit flow, despite the sector’s scale and export contribution,” the report stated.
“The sector continues to face high capital costs and limited access to formal finance, particularly for MSMEs,” it added.
Procurement of raw materials, such as gold, platinum, and rough diamonds, remained fragmented and expensive. “Limited access to duty-free inputs, restrictive eligibility under mechanisms like IIBX (India International Bullion Exchange), and the absence of efficient replenishment systems increase procurement costs, especially for smaller exporters,” the report stated.
It added, “These constraints directly impact cost competitiveness, as global hubs such as Dubai provide seamless and cost-efficient access to raw materials.”
The report also flagged gaps in data availability and design capabilities. A lack of granular data on value addition and employment, along with limited capacity in designing low-carat jewellery, also affected export performance.
Foreign direct investment (FDI) in the sector remained low and volatile. “Cumulative equity FDI inflows into the sector during this period amounted to $0.73 billion, out of total FDI inflows to India of $481.5 billion, translating to a share of approximately 0.2 percent over 2015–2024,” the report stated.
Recommendations
Despite strong processing capabilities, India remained concentrated in mid-value segments, while high-value markets were dominated by countries such as Italy.
To address this, NITI Aayog recommended a shift from volume-driven exports to value-led growth, with a focus on design, branding, and product diversification.
To improve export competitiveness, the report called for addressing cost and supply-side constraints. This may include aligning free trade agreements with sector-specific requirements such as consignment exports, streamlining duty drawback and refund mechanisms, and ensuring faster clearances.
The federal think tank also emphasised expanding financial access for the sector, which remained heavily dependent on working capital.
“Expanding collateral-free lending through strengthened credit guarantee mechanisms, introducing targeted interest subvention, and promoting alternative instruments such as export factoring and supply chain finance can ease liquidity constraints,” the report stated.
Finally, the report called for investment in skills, technology, and cluster infrastructure. “Establishing Centres of Excellence, promoting industry-academia collaboration, and enabling global exposure can strengthen design and manufacturing capabilities,” the report stated.
(Edited by Madhurita Goswami)
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