Gems And Jewellery Industry Eyes Rebound With Recovery Of Chinese Market, Says Analyst

Deepali Vijay Jain, founder and chairperson of DiamondXE, said amendments to SEZ Act and the upcoming India-UAE Comprehensive Economic Partnership Agreement offer prospects for export revival

India's overall gems and jewellery exports declined by 11.49 per cent to Rs 22,873.19 crore ($2,748.01 million) in October, according to the Gem and Jewellery Export Promotion Council (GJEPC) data. The gross exports stood at Rs 25,843.84 crore ($3,134.85 million) during October 2022, the data showed. Cut and Polished Diamonds (CPD) exports witnessed a fall of 32.70 per cent to Rs 10,495.06 crore ($1,260.91 million) in the previous month compared to Rs 15,594.49 crore ($1,891.2 million) in the year-ago period.

Deepali Vijay Jain, founder and chairperson of DiamondXE, said that this year October witnessed an 11.49 per cent fall in Indian gems and jewellery exports, driven by weakened global diamond demand, notably in the US and China. She, however, said that despite these challenges, the future hold promise. "Potential amendments to the SEZ Act and the forthcoming India-UAE Comprehensive Economic Partnership Agreement (CEPA) offer prospects for export revival. Focused efforts on jewellery may particularly benefit. The industry expects a rebound with the recovery of the Chinese market and the upcoming festive season in the US, heralding positive momentum for FY24," she said.

“High interest rates, inflation, and geopolitical unrest have dampened market appetite. Russian rough diamond scarcity resulted in a 32.70 per cent drop in Cut and Polished Diamonds (CPD) and a 23.01 per cent decrease in Polished Lab Grown Diamonds (LGD) exports compared to October 2022,” Jain added.

Gross export of polished Lab Grown Diamonds (LGD) in October dropped by 23.01 per cent to Rs 1,135.16 crore ($136.38 million) against Rs 1,474.38 crore ($178.73 million) in the corresponding month of 2022.

"The overall gems and jewellery exports were down in October mainly due to slowdown in demand in key markets like the US and supply constraints of diamond, which constitutes 50 per cent of the total shipments. We are hoping the markets pick up during the Christmas season," GJEPC chairman Vipul Shah said. However, the total gross export of gold jewellery increased by 33.48 per cent to Rs 8,619.38 crore ($1,035.54 million) in October over Rs 6,457.48 crore ($784.11 million) in the same period of the previous year.