Investor Centre Market Information
Market Information
Industry Type

Gems and Jewellery

Industry Specifics

India is the largest diamond processing centre and the biggest buyer of gold in the world.

With a workforce of more than 4.64 mn, the industry contributes nearly 7% to India’s GDP and over 15% to the country’s merchandise exports. 

This industry is however largely driven by the unorganised sector (70%) and is highly gold intensive (85 -90%), though the face of the industry is slowly changing with the growing force of corporate retail sector and the shifting jewellery preferences of consumers. 

India today has become one of the most sought after sourcing destinations for gems and jewellery for the global market because of its low costs and availability of high-skilled labour.  Based on its potential for growth, the Government of India has declared the Gems and Jewellery sector as a focus area for export promotion and has recently undertaken various measures to promote investments and to upgrade technology and skills.

Industry Size:

The Gems and Jewellery sector is going through a rough phase due to the recent crisis triggered by unethical activities and other macroeconomic factors. Despite all the challenges faced by the industry, FY 2018-19 performed moderately well.

The gems and jewellery market in India is home to more than 300,000 players, with the majority being small players. Its consumer market size is about USD 75 bn and is expected to grow at a CAGR of 5.6% over FY19-23. It contributes 29% to the global jewellery consumption. 

Even though the diamond  consumer market in India is still under-developed with only 8% of world consumption, self-purchase category accounted for 58% share of studded purchase in 2018 as compared to 35% in 2016.

During the year, the overall gross exports from India witnessed a decline of 3.12%, recorded at USD 39.68 bn as compared to USD 40.96 bn in the previous year. While exports of cut and polished diamonds grew by a moderate 0.42% to USD 23.8 bn, gold jewellery exports grew by an impressive 24.6% to USD 12.03 bn in FY19. India's main export destinations are the US, Europe, Japan and China. America accounts for about one-fourth (USD 10 bn) of the country's total gems and jewellery exports.

Prospects of the Industry:

As in years past, India had the highest potential for diamond jewellery retail growth. Despite current inflation and a weaker rupee in the first half of 2018, personal disposable income is expected to grow in India and provide basis for increase in demand.

The share of diamond jewellery sales in stores has grown to 12 -15% with the space allocated to diamonds by retailers as a category, even in tier II and tier III towns,  having increased 2.5 times. The triggers for this growth are - Women buying diamond jewellery for multiple occasions other than marriage and major festivals, preference of millennials for lightweight trendy jewellery, and consumer education and increased price transparency leading to better acceptance of diamond jewellery.

Besides the generational shifts in consumer preferences, other key trends shaping the future of the diamond industry are – shift to organized retailing to corner 42% market share by FY23, transformation of the retail experience to include omni-channel touchpoints, the growing presence of affordable lab-created diamonds, and the increasing influence of digital technologies to deliver superior customer experiences. Industry players must adapt their marketing strategies to incorporate the growing role of influencers and social media shopping so as to attract younger consumers. Online sales are expected to account for 1-2% of the fine jewellery segment by 2021-22.

The Gems and Jewellery sector is witnessing changes in consumer preferences due to the adoption of western lifestyle. The changing face of the modern consumer will drive not only the evolution of the product category and designs but also the contact points for sale. 

On the infrastructural front, GJEPC plans to work with the Government’s Skill India mission to upgrade the skills of industry workers.  The Council has set up new gem and jewellery institutes at Varanasi in Uttar Pradesh and Udupi in Karnataka. 

The Council also aims at making India a global gem & jewellery manufacturing hub by promoting local artisans and indigenous design and production, and has already set up Common Facility Centres (CFCs) which provide advanced technology & machinery to the SMEs of the sector in Visnagar, Palanpur, Amreli and Junagadh in Gujarat; it has plans to set up CFCs in Delhi, Kolkata, Jaipur and Hyderabad by 2019-2020. 

The Gem and Jewellery Export Facilitation Centre, a first-ever initiative of its kind, was set up in 2019 to provide assistance to exporters with regard to various government policies, as well as facilitate promotion and marketing. 

The Council intends to work closely with all Government Ministries and bodies to ensure that the sector achieves its objective of touching USD 60 bn exports and employing 6 mn by the year 2022.