Foreign Direct Investment (FDI) in India’s gems and jewellery sector increased by 673% year on year in the first quarter of FY2024, to $40 million (INR 330 crore), up from $5 million (INR 42 crore) in the same period in 2023. This huge surge reflects restored investor confidence in the sector.
According to a GJEPC assessment based on the Department for Promotion of Industry & Internal Trade (DPIIT) database, the gems and jewellery sector’s contribution of India’s total FDI inflows increased to 0.24% in Q1 FY2024, up from 0.05% in Q1 FY2023. This increase in the sector’s participation reflects India’s growing status as a manufacturing hub for world-class gems and jewelry, as well as its growing global appeal as a favored location for foreign investment.
Vipul Shah, Chairman of GJEPC, stated, “Foreign investments often offer not just finance but also innovative technology, enhanced manufacturing processes, and new market linkages, all of which are critical for the sector’s growth and worldwide competitiveness. The infusion of finance is projected to result in increased manufacturing capacity, design innovation, and improved worldwide branding for Indian jewellery products. The entry of foreign finance is also consistent with India’s objective of becoming a global leader in gem and jewelry manufacture.”
Overall, FDI inflows into India increased by 47.8% to US$ 16 billion (INR 1.34 trillion) from April to June 2024, compared to US$ 11 billion (INR 899 billion) in the same period last year. This indicates a favorable investment climate, which is reinforced by government measures aimed at attracting foreign money. With the government’s ongoing efforts to reform the FDI system and improve the business environment, India is expected to attract more foreign investment in the future years.