India’s gems and jewellery exports are likely to decline by 10 to 15% in the current financial year on account of slowing demand in key markets like the U.S. and China, GJEPC Chairman Vipul Shah has said.

The gems and jewellery exports grew 2.48% year-on-year to ₹3,00,462.52 crore (over $36 billion) in FY23, according to the Gems and Jewellery Export Promotion Council (GJEPC).

Addressing the media, on the sidelines of an event here on Monday evening, the GJEPC Chairman informed that the Commerce Ministry has given a target of $42 billion for the gems and jewellery segment exports in 2023-24.

“For gems and jewellery, the major contributing market is the U.S. and China, the demand is slowing there. Rising interest cost, inflation, all these concerns and consumers’ confidence is also going down,” Mr. Shah said.

Going ahead, “we expect that overall we should see a 10 to 15% decline in the gems and jewellery exports,” he said on GJEPC estimates for the current fiscal ending March.

Diamonds constitute more than 55% of the overall gems and jewellery export basket, Mr. Shah informed.

The exports target (for the current fiscal) is $42 billion which was given by the Ministry of Commerce, he added.

A worker in one of the oldest and largest diamond polishing units of Surat checking its dazzle. File image for representation
| Photo Credit: Vijay Soneji

To harness the potential of Lab Grown Diamond (LGD) or synthetic diamond segment, the Union Budget 2023-24 presented by the Finance Minister Nirmala Sitharaman has laid emphasis on research & development as well as to make it competitive in the international markets.

“LGD is a technology-and innovation-driven emerging sector with high employment potential. These environment-friendly diamonds which have optically and chemically the same properties as natural diamonds. To encourage indigenous production of LGD seeds and machines and to reduce import dependency, a research and development grant will be provided to one of the IITs for five years,” the FM said in the Parliament.

Also Read: Key Highlights from Union Budget 2023-24

To reduce the cost of production, the FM has proposed to reduce basic customs duty on seeds used in their manufacturing. Also she has proposed to increase customs duties on silver dore, bars and articles to align them with that on gold and platinum.

Vipul Shah, Chairman, Gem & Jewellery Export Promotion Council (GJEPC) said the FM” decision to accept their recommendation pertaining to the LGD industry would ensure India’s end-to-end world leadership in rough to finished lab-grown diamond and jewellery manufacturing.

“Another positive pro-growth move is that the conversion of physical gold into digital gold will not attract capital gains tax,” he said.

Saiyam Mehra, Chairman, Gem & Jewellery Council (GJC), the domestic council of the industry said, “The Gems & Jewellery Industry’s critical concerns are not addressed in the Union Budget 2023-24. While the Research and Development grant will be provided to one of the IITs for the development of Lab Grown Diamond seeds and machines, the other sectors of the industry have been ignored.”

“The reduction in Gold Custom Duty in this Budget was our big expectation, which has severely hampered the industry and encouraged smuggling and grey market. GJC has been actively representing the reduction in customs duty of Gold over past many years. However, the Silver Dore Bars Custom Duty has been brought at par with Gold and platinum in this budget. This move will adversely affect the masses,” he said.

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