Gems & Jewellery Exports Down 40 Pc In A Decade

Chennai : Gems and jewellery exports have fallen more than 40% from their peak in the last decade. In FY12, exports were over $45 billion, while in FY26 they are down to about $27 billion. At one point, gems and jewellery accounted for 17% of India’s export basket; today, that share has slipped to 6%. Yet global jewellery demand has continued to rise. Vipul Shah, former chairman of the Gems and Jewellery Export Promotion Council (GJEPC), believes the sector has bottomed out and is poised for a rebound.

The sharp decline in exports in FY26 was mainly triggered by the imposition of tariffs by the United States. Loose diamonds, which make up nearly half of the export basket, were hit the hardest. The anticipated trade agreement with the U.S., once finalised, is expected to ease some of these pressures and restore momentum in exports.

Geopolitical tensions, particularly involving Iran, Israel and the U.S., further complicated the outlook by weakening demand in the Middle East. At the same time, soaring precious metal prices dampened consumer sentiment. Gold prices surged 61% and silver jumped 128% in FY26, making jewellery increasingly unaffordable and prompting consumers to delay purchases.

A deeper structural challenge lies in the cut and polished diamond segment, which accounts for about 50% of exports. This category has seen a steep decline, with exports falling from around $22 billion at their peak to nearly $11–12 billion.

Despite the export slowdown, global demand trends remain strong. The U.S. jewellery market has expanded from $70 billion to $105 billion over the past decade, while China’s market has grown from $39 billion to $94 billion. However, consumption patterns have shifted. In China, post-pandemic demand has leaned more towards gold as a store of value rather than studded jewellery, while in the U.S., lab-grown diamonds have captured a growing share of the market.

India continues to retain its leadership in diamond processing, particularly in cutting and polishing both natural and lab-grown diamonds. The country dominates the smaller stone segment and commands a significant share in lab-grown diamond production. At the same time, Indian companies are increasingly investing in mining hubs such as Botswana and South Africa to secure access to raw materials.

Operational challenges also persist. Restrictions in special notified zones, where rough diamonds can be displayed and auctioned but not directly sold to Indian processors, have added to logistics costs and reduced efficiency. Addressing such bottlenecks could improve competitiveness.

The industry is becoming more organised and professional, with growing participation from corporates and designers who are adapting quickly to global trends. Skilled labour remains a critical strength, supported in recent years by the parallel growth of the lab-grown diamond segment, which has helped absorb workforce disruptions.

With easing supply-demand imbalances, greater clarity between natural and lab-grown diamonds, and supportive policy measures, the sector is positioning itself for a gradual recovery in the coming years.