India has been fascinated with jewels for 5,000 years, since the Indus Valley civilisation. The nation produced and exported more pearls than any other country on the globe at that time. With a significant impact on the Indian economy, the gem and jewellery sector has become one of the most prominent industries in India today.
According to the statistics, it accounts for 7% of India’s GDP and 15.71% of all merchandise exports, which is one of the industries with the fastest rate of growth.
The government has also designated the gems and jewellery industry as the primary focus for promoting exports due to its potential for development and value addition.
In this article, we will take an in-depth look into the jewellery industry in India, including how it started, its current market scenario and what the future holds for the industry.
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Understanding the gems and jewellery industry in India
India’s gem and jewellery sector plays a major role in the country’s economy and is one of the biggest contributors to the worldwide jewellery and diamond industry.
Gold has significant cultural importance in the nation, serving as a symbol of prosperity and social standing, an indicator of value, and a necessary component of several festivities. Across the country, gold is seen as a celebration rather than an ornament.
India is said to be the heart of the world’s jewellery industry due to its affordable workforce and abundance of highly qualified workers. With strong government policy backing the cutting and polishing sector, India stands as the world’s leading hub for diamond cutting and polishing.
With a predicted revenue of US$76.77 billion in 2023, India shines out as the leading revenue producer in the jewellery industry when compared to other nations worldwide.
A brief history of the jewellery industry in India
India was the only gemstone supplier for almost 2,000 years. Merchants travelled to India for Kashmir sapphires, Golconda diamonds, and Gulf of Mannar pearls. Rulers used diamonds to show authority, wealth, and status.
India still has a highly fragmented gold market, despite its long history. However, the sector has become more structured and controlled in recent years. While independent local shops continue to rule the industry, national and regional chains have slowly gained market share over the last few years.
Gold plays a major role for 1.4 billion people, serving as both an investment and an ornament. It is, therefore, not a surprise that India was the world’s biggest consumer of gold for many years until China surpassed India in 2009.
Market today: Government plans to boost the industry
India is among the top seven global exporters, with its gem and jewellery exports accounting for 3.5% of global exports overall.
With a 29.0% share of global exports, diamond jewellery is the most popular product, followed by lab-grown and synthetic stones with 22.0% and 32.7% shares, respectively, and silver-cut diamonds.
As one of the biggest exporters of jewellery and diamonds, the sector makes up a significant amount of the nation’s overall foreign currency reserves.
In 2022–2023, India exported a total of US$ 37.73 billion worth of jewellery and diamonds. India’s gem and jewellery exports from April to December 2022 were US$ 28.6 billion, up 6.28% over the same period a year earlier.
The Government of India has implemented policies to encourage the development of gem and jewellery companies, as it is the fastest-growing sector. Here, we’ve outlined a few crucial points:
- India and the United Arab Emirates inked a free trade agreement (FTA) that would likely increase exports to US$ 52 billion.
- Additionally, the government has chosen to lower the customs charge on polished and cut diamonds as well as coloured gemstones from 7.5% to 5% or even nothing.
- Platinum and palladium import duties were lowered from 12.5% to 10%, while gold and silver import duties were dropped from 12.5% to 7.5%.
Additionally, the industry has witnessed a rise in online sales. As an example, in 2020, online sales increased by 106% for Tanishq, one of the top jewellery businesses in India.
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Future of the jewellery industry in India
Large retailers or brands will play a major role in the expansion of the gem and jewellery industry in the next few years. Well-known brands lead the organised market and provide growth prospects. Additionally, the sector could benefit from the easing of the limitations associated with gold imports.
The costume jewellery (fashion jewellery crafted from affordable imitation gemstones) industry in India is projected to grow at a compound annual growth rate (CAGR) of 8.64% from 2022 to 2027.
On the other hand, the online jewellery market is expected to grow at a CAGR of 15.55% from 2022 to 2027. According to forecasts, the market will expand by USD 36.23 billion.
In the next few years, the Indian government hopes to reach a significant milestone of US$100 billion in jewellery exports by 2027.
Top jewellery stocks in India
Below is a list of top jewellery stocks ranked by market capitalisation on BSE (as of December 12, 2023)
|Market cap (₹ cr)
|Last price (₹)
|Net profit (₹ cr)
We believe that the coming years will be vital to stabilising India’s economic development. The gem and jewellery sector will continue to thrive. Given the recent favourable changes in the industry, it seems likely that the demand for gems will be significantly boosted as well.