Export of gems and jewellery last fiscal declined 14 per cent to $32.28 billion against $37.74 billion logged in the same period last year due to weak demand. However, gold jewellery exports increased 17 per cent to $11.23 billion against $9.62 billion in previous year.
Thanks to the free trade agreement, plain gold jewellery exports to UAE more than doubled to $4.53 billion in FY24 against $2.18 billion in the previous year. Markets of UAE and Bahrain accounted for over 85 per cent of plain gold jewellery exports.
Gold jewellery exports to Australia also increased by 37 per cent due to ECTA (Economic Cooperation and Trade Agreement).
Vipul Shah, Chairman, the Gem and Jewellery Export Promotion Council, said the increase in plain gold jewellery exports may be attributed to the pragmatic foreign trade agreements by the government. The implementation of India-UAE CEPA has helped the industry overcome various challenges including economic downturns in major export markets and escalating geopolitical concerns, he added.
Challenges
However, he said the year was very challenging for exports due to high interest costs, inflation and slackening of market demand in the US and lower growth in China after Covid hit the gem and jewellery industry hard in first half of the year. Also, the Ukraine war and uncertainty on import of rough diamonds from Russia worsened the scenario, he said.
Cut and polished diamond exports last fiscal fell by 28 per cent to $15.97 billion ($2.20 billion) in the previous year.
The diamond industry’s decision to voluntarily halt natural rough diamond imports for two months from last October 15 helped address demand-supply imbalances and resulted in a positive impact on the prices of polished diamonds, he added.
GJEPC is in discussion with global diamond miners to increase investments in enhancing generic promotion of diamonds and diamond jewellery in the US, China, Middle East including India, said Shah.
Gross silver jewellery export last fiscal dipped 45 per cent to $1.62 billion ($2.94 billion) while coloured gemstone and platinum gold jewellery exports were up at $479 million($420 million) and $163 million($30 million).
Polished lab-grown diamond exports declined 17 per cent to $1.40 billion ($1.68 billion).
The industry is concerned with the ongoing conflict in the Middle East and may have an impact on the overall exports in the first quarter of FY24-25.