Chennai: Despite India’s gems and jewellery industry having a large domestic market and export segment, the Foreign Direct Investment (FDI) into the sector is just 0.24 per cent.
According to the GJEPC, the gems & jewellery sector’s share in India’s overall FDI inflows expanded to 0.24 per cent in Q1 FY2024, up from a mere 0.05 per cent in Q1 FY2023 when it received $40 million in the quarter against $5 million in the year-ago quarter.
Overall, FDI inflows into India surged by 47.8 per cent to $16 billion (Rs 1.34 trillion) in April-June 2024, compared to $11 billion (Rs 899 billion) in the corresponding period of the previous year.
“Foreign investments typically bring not only capital but also advanced technologies, improved production processes, and new market linkages, all of which are vital for the sector’s growth and global competitiveness,” said Vipul Shah, Chairman, GJEPC.
In FY2024, cut and polished diamonds exports from India contracted by 28 per cent led by worsened global macroeconomic conditions and competition from lab-grown diamonds (LGD). With continued subdued demand conditions amid inflationary pressures in the US and changing consumer preferences in China, the industry witnessed a decline in exports of around 19 per cent in 4M FY2025.
ICRA expects CPD exports to decline by 18 per cent in H2 FY2025 despite some recovery in demand during the festive season, resulting in an overall decline of 18-19 per cent in FY2025 to $13 billion. This will mark the decadal low levels of CPD exports from India.
