India’s Gem & Jewellery Exports FY 2023-24: Resilience, Strategic Growth, and Future Outlook

The financial year 2023-24 presented a dynamic landscape for India’s gem and jewellery export sector. While overall exports experienced a moderate decline, strategic categories like plain gold and platinum jewellery showcased remarkable growth, underscoring the industry’s agility and the positive impact of proactive trade policies. This detailed analysis delves into the performance across various segments, highlighting the challenges faced, the strategies employed for recovery, and the optimistic outlook for the future.

Overall Export Performance: A Story of Resilience

The gross exports of Gems & Jewellery in FY 2023-24 registered a decline of 14.45%, amounting to US$ 32,285.85 million, compared to US$ 37,737.05 million in the preceding financial year. However, this headline figure belies a significant turnaround within the year, demonstrating the sector’s inherent resilience and capacity to adapt to adverse conditions.

Vipul Shah, Chairman of the Gem & Jewellery Export Promotion Council (GJEPC), eloquently captured this spirit of recovery, stating, “The point to be noted here is the decline in gross gem and jewellery exports, which stood at a challenging 25.04% in the first half of the financial year, narrowed dramatically to just 1.60% in the second half. This remarkable recovery showcases the industry’s resilience and ability to bounce back even in challenging times.” This strong rebound in the latter half of the year speaks volumes about the industry’s concerted efforts to overcome global headwinds.

Navigating Global Headwinds

The initial challenges of FY 2023-24 were multifaceted. As Vipul Shah elaborated, “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 first half of the year. Also, the Ukraine war and uncertainty on import of rough diamonds from Russia worsened the scenario.” These global economic pressures and geopolitical uncertainties created a tough operating environment, impacting consumer spending and trade flows in key markets.

The Golden Glow: Stellar Growth in Gold Jewellery Exports

Amidst the varied performance, gold jewellery emerged as a shining star, particularly the plain gold segment, which demonstrated extraordinary growth.

Gross export of total Gold Jewellery (both Plain & Studded) for the FY 2023-24 grew 16.75% to US$ 11,230.18 million, significantly up from US$ 9,618.80 million in the previous year.

Plain Gold Jewellery Leads with Exceptional Growth

The plain gold jewellery sector showcased an impressive surge, growing by 61.72% to reach US$ 6,792.24 million in FY 2023-24, a substantial increase from US$ 4,199.96 million in FY 2022-23. This remarkable performance highlights strong demand and strategic market penetration.

The total gold jewellery segment (comprising both plain and studded jewellery), which initially experienced a 10.47% decline between April 2023 and September 2023, orchestrated a powerful comeback in the latter half of the year, achieving an outstanding growth of 46.91%. This robust rebound underscores renewed consumer confidence and effective industry strategies.

Key Markets Driving Gold Jewellery Growth

Several international markets were instrumental in this growth, particularly for plain gold jewellery exports from India:

The United Arab Emirates (UAE) solidified its position as a pivotal market, experiencing a phenomenal growth of 107.2%. Exports to the UAE soared to US$ 4,528.66 million in FY 2023-24, compared to US$ 2,185.67 million in the previous year.
Collectively, the markets of UAE and Bahrain accounted for an overwhelming share, representing over 85% of India’s plain gold jewellery exports, demonstrating the critical importance of these regions.
Australia also contributed significantly, witnessing a commendable growth of 37% in plain gold jewellery exports. This positive trajectory is largely attributed to the benefits derived from the India-Australia Economic Cooperation and Trade Agreement (ECTA).

Speaking about this significant increase in plain gold jewellery exports, Vipul Shah, Chairman, GJEPC, commented, “The impressive increase in plain gold jewellery exports can be directly attributed to the pragmatic foreign trade agreements championed by the Government. The implementation of the India-UAE Comprehensive Economic Partnership Agreement (CEPA) could not have come at a more opportune time, especially when the industry was grappling with various challenges, including economic downturns in major export markets and escalating geopolitical concerns, all of which had contributed to a decline in demand.”

Platinum Jewellery: A Phenomenal Surge

Platinum jewellery exports presented one of the most striking success stories of the fiscal year, demonstrating an extraordinary growth trajectory.

In FY 2023-24, Platinum Jewellery exports recorded a very robust growth of 449.16%, reaching US$ 163.48 million, a significant leap from the comparative figure of US$ 29.77 million for the previous year. This meteoric rise indicates a growing global appetite for platinum and successful market penetration efforts.

Coloured Gemstones: A Steady Ascent

The coloured gemstones segment also contributed positively to the overall export landscape, showcasing consistent growth.

Gross export of Coloured Gemstones for the FY 2023-24 increased by a healthy 14%, reaching US$ 478.71 million, up from US$ 420.13 million in the preceding year. This steady performance reflects sustained demand for vibrant and diverse gemstones.

Navigating the Diamond Market: Challenges and Strategic Responses

The diamond sector, particularly cut and polished diamonds, faced considerable headwinds during the fiscal year, though strategic interventions aimed at stabilization.

Cut & Polished Diamonds Face Headwinds

Cut & Polished diamond exports in FY 2023-24 decreased by 27.58%, settling at US$ 15,967.02 million compared to US$ 22,047.72 million in the previous year. This decline reflects the challenging global demand environment for natural diamonds.

Despite experiencing sluggish demand from key export markets, these regions still accounted for substantial exports. The USA remained a significant market with US$ 5,598.81 million, followed by Hong Kong at US$ 4,360.30 million, and the UAE with US$ 1,714.39 million. These figures underscore the continued importance of these traditional markets even in periods of reduced demand.

To address the demand-supply imbalances that plagued the market, the diamond industry undertook a proactive measure. As Vipul Shah noted, “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.” This temporary cessation was a strategic move to stabilize prices and restore market equilibrium.

Looking ahead, GJEPC is actively engaged with global diamond miners to foster growth. Vipul Shah added, “GJEPC is discussing with Global Diamond miners to increase investments in enhancing generic promotion of diamonds and diamond jewellery in the US, China, Middle East including India.” These collaborative efforts aim to stimulate consumer interest and drive demand in crucial markets.

Optimism surrounds the upcoming industry events. The largest jewellery fair in the USA, scheduled for the end of May, is anticipated to mark a significant turnaround for US exports. It is widely expected that by September 2024, diamond and diamond jewellery exports will witness robust growth, signaling a recovery in this vital sector.

Polished Lab Grown Diamonds See a Dip

The relatively newer segment of polished lab-grown diamonds also experienced a decline during this period.

Gross export of Polished Lab Grown Diamonds for the FY 2023-24 declined 16.54% to US$ 1,402.44 million over the comparative figure of US$ 1,680.29 million for the previous year.

Silver Jewellery: A Mixed Performance

Silver jewellery exports faced a contraction during the fiscal year.

Gross export of Silver Jewellery for the FY 2023-24 declined 44.97% to US$ 1,618.97 million over the comparative figure of US$ 2,942.20 million for the previous year. This substantial decline indicates a shift in consumer preferences or market dynamics for silver products.

GJEPC’s Proactive Stance: Strategies for Future Growth

The GJEPC continues to play a pivotal role in promoting Indian gem and jewellery exports, adopting a multifaceted approach to ensure sustained growth and market diversification.

Vipul Shah highlighted GJEPC’s proactive engagement: “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.” These strategic partnerships are crucial for opening new avenues and strengthening existing trade relationships.

Tapping New Markets and Fostering Connections

With an objective to tap and penetrate new markets, GJEPC has made concerted efforts to explore untapped regions. This includes successful delegations to Vietnam and Cambodia, and a planned delegation to Latin American countries in May, specifically designed to give a significant fillip to exports from India. Such initiatives are vital for reducing dependency on traditional markets and expanding the global footprint of Indian jewellery.

As always, GJEPC is steadfast in its commitment to ensuring that exporters remain connected with international buyers. This is achieved by meticulously organizing Buyer-Seller Meets and actively participating in leading international shows. This year alone, GJEPC is participating in a total of 15 international shows across different parts of the world, providing maximum exposure to Indian exporters and thereby helping to boost exports significantly.

Challenges Ahead and Optimistic Outlook

Despite the strategic efforts and signs of recovery, the industry remains vigilant about potential future challenges. The ongoing conflict in the Middle East is a significant concern, as it may impact overall exports in the first quarter of FY 2024-25. Geopolitical stability is crucial for global trade, and the industry is closely monitoring these developments.

Nevertheless, the Indian gem and jewellery industry, championed by organizations like GJEPC, continues to demonstrate remarkable adaptability and foresight. By leveraging strategic trade agreements, diversifying market reach, fostering innovation, and prioritizing global collaborations, the sector is well-positioned to navigate future complexities and achieve sustained growth. The impressive rebound in plain gold and platinum jewellery exports serves as a testament to the industry’s resilience and its bright prospects on the global stage.