According to the report of the World Gold Council, the gems and jewellery (GJ) industry is a key contributor to India’s total exports! Given the high dependence on bullion and doré imports and the subsequent effect this has had on the country’s current account deficit (CAD), gems and jewellery (GJ) exports play an important role in cushioning at least some of this impact.
For instance, GJ exports have accounted for 11% of India’s total exports; worth approximately US$25-40bn per year during the financial years 2012 to 2022. These exports include several product segments, such as cut and polished diamonds, gold jewellery and medallions, rough diamonds, gemstones, pearls, synthetic stones and fashion jewellery.
Of these, cut and polished diamonds accounted for over half of the total, while gold jewellery (plain and studded) accounted for 23% in 2021.
Yet, the report said, ‘Share of plain gold jewellery has declined in the export mix!’ Reflecting this market share shift among export destinations, the product mix of gold shipments has also changed. During the UAE’s earlier export market dominance, plain gold jewellery accounted for a larger share than studded gold jewellery (which is mostly studded with diamonds).
However, between 2019 and 2021, the greater influence exerted by the US caused a marked reversal of this trend. To put this into perspective, in 2019 exports of plain gold jewellery – at US$8.7bn – were more than double that of studded gold jewellery (US$3.4bn). But by 2021, the growth in exports of studded gold jewellery (US$4.4bn) had outstripped plain gold jewellery (US$4.1bn). Importantly, the share of studded jewellery in India’s export mix increased from less than 30% in 2018 to 48% in 2021.