Investor Center Market Information
Market Information
Industry Type

Gems & Jewellery

Industry Specifics

India's Gems and Jewellery Industry is the largest consumer of gold contributing 29% to the global jewellery consumption, as well as the largest player in diamond cutting and polishing with 12 out of 14 diamonds sold in the world either cut or polished in India.

The sector is home to more than 500,000 gems and jewellery players, and contributes about 7% to India’s GDP. By giving employment to over 4.6 million people, the industry is a major contributor to the government's Skill India Initiative. The sector is an important foreign exchange earner and has a 15.71% share of India’s total merchandise exports in 2016-17.

The Government has declared this sector as a focus area for export promotion and undertaken various measures based on its potential for growth and value addition.

Industry Size

Despite the disruptions in 2016 on account of various unexpected developments across the globe, and demonetisation and looming introduction of GST on the home front, gems and jewellery exports showed positive growth rate in 2016-17.

Gems & Jewellery exports from India grew 10% year-on-year to USD 43.15 bn in 2016-17, according to figures released by GJEPC.

Gross exports of cut and polished diamonds in FY17 increased to USD 22.78 bn, up 10.24%, compared with USD 20.66 bn in the previous year. Hong Kong at 38% continued to be the largest export destination, followed by USA at 30%, Belgium at 10% and UAE at 9%.

Exports of gold jewellery rose 1.92% to USD 8.72 bn as compared with USD 8.55 bn in 2015-16. UAE (44%) was the largest export destination in value terms followed by Hong Kong (28%) and USA (18%), while USA (36%) was the largest export destination in terms of volume.

While diamond exports gained, domestic jewellery sales lost its sheen towards end of the year. After an initial rush for gold following demonetisation, the changing tax regime and tighter regulations around jewellery transactions caused jewellery demand in India to fall by 24% in 2016.

The size of the domestic jewellery market is about USD 60 bn as of 2017 and is estimated to reach USD 100-110 bn by 2021-2022.

Prospects of the Industry

After an eventful year, there are positive signs and vital developments indicating improvement in the economic environment. CARE Ratings is optimistic about growth in the domestic retail jewellery segment on back of favourable demographics, fading of regulatory headwinds such as demonetisation and GST implementation and shift in preference towards branded jewellery.

In the long run, GST will create a unified and transparent market and we can expect significant shifting of market share from unorganised to organised players.

Millennials and post-millennials will dominate the majority of the market. As such, the jewellery industry is shaping itself up to cater to their specific demands.

With more and more established brands utilising technology and innovation and customers, on the other hand, especially millennials, getting more technology-savvy and aware of trends, the jewellery industry is expected to undergo a major upheaval in the coming years. The industry will be largely machine-driven, thereby boasting of truly superior craftsmanship and attention to detail.

Moving away from occasion-based consumption, Indian consumers have evolved to treat jewellery as fashion accessory, and this is driving retailers’ incorporation of distinct collections such as wedding wear, work wear, regular or daily wear and fashion wear.

The communion of physical jewellery outlets and online portals is expected to peak in the coming years and result in a mobility and convenience driven model that will benefit both consumers and sellers. In urban India, 40% of consumers said that they browsed online before purchasing their jewellery. The online jewellery market in India is expected to hit USD 3.6 bn in value in the next three years, accounting for roughly 20% of the global market size estimated at USD 18 bn.

On the export front, the government expects the Gems and Jewellery Industry to grow 6-7% per annum and has set a target of USD 60 bn exports by 2022 from the present USD 43 bn.

India is expected to play a more important role in the global rough diamond trade with diamond miners setting up auction centres in India, since the establishment of the special notified zone in the Bharat Diamond Bourse in 2015.