Gems & jewellery sector woes

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Bikky Khosla | 16 Jul, 2024

The gems & jewellery sector has remained one of the champion sectors of the Indian industry for decades. As per 2022 statistics, the sector contributes around 7 percent to the country’s GDP and more than 15 percent to India’s total exports. Also, it employs some 5 million people and a major portion of the sector consists of small and medium enterprises. These figures speak for themselves about the importance of the sector to the national economy. But the sector is recently in news not for good reasons.

According to recently published official data, at $1909 million exports of gems & jewellery fell 15 percent in June, which was preceded by 4.97 percent decline in May and 11 percent fall in April, impacted mainly by global economic uncertainties and geo-political concerns. Overall, during or the April-June period, exports declined over 7 percent while imports recorded nearly 3 percent growth. This trend is not at all encouraging and a deeper look into it gives a complex picture.

Exports of cut and polished diamond – in which India leads – witnessed a sharp decline, falling by 26.35 percent in June and 18.29 percent in the April-June period. On the other hand, imports of rough diamond fell by 15.39 percent during the quarter while exports of even polished lab-grown diamonds saw an 8.96 percent decline in June. Gold jewellery exports, on the other hand, provided a silver lining, growing by 6.36 percent in June, with studded gold jewellery exports rising 17.58 percent but plain gold jewellery exports falling 3.38 percent in June.

In the background of these challenges, GJEPC – the export promotion council for the sector- recently raised several concerns before the Commerce Ministry over a range of issues, including slowdown in global demand, unavailability of gold – particularly among MSMEs and non-release of bonds by banks for nominated agencies. No doubt, the gems & jewellery sector is currently going through a rough phase and it will be interesting to see how the upcoming Union Budget unfolds for the sector on July 23.

I invite your opinions.