MARKET COMMENTARY – India is set to grow sharply as a gems and jewellery supplier and market

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By David Brough

MUMBAI – India has an extraordinary future as a gems and jewellery supplier and market.

Many industry analysts see India becoming the world’s number 1 jewellery market within a decade, up from possibly the number 2 spot now. India is presently the world’s number 2 gold importer.

The Indian economy is currently the fastest-growing large economy, and is the fifth largest economy in the world, eyeing the number three position within a few years.

GEMS AND JEWELLERY

One of the engines of this growth is the powerful gems and jewellery sector, now representing more than 75 billion U.S. dollars in exports annually, and on track to hit a “magic” 100 billion dollars target in a few years.

One can feel the palpable energy of the Indian jewellery market during visits to leading trade shows, such as the January 4-7, 2024, India International Jewellery Show (IIJS) Signature, in Mumbai.

MARKET COMMENTARY – India is set to grow sharply as a gems and jewellery supplier and market

Inauguration ceremony, IIJS Signature 2024

The key driver of growth in the vast domestic Indian jewellery market is wedding demand.

The crammed booths at IIJS Signature, packed with Indian retail buyers, augured for a buoyant next phase of the wedding season, which will run from mid January to March, 2024.

MARKET COMMENTARY – India is set to grow sharply as a gems and jewellery supplier and market

IIJS Signature 2024

Wedding demand in India accounts for roughly 60 percent of total Indian gems and jewellery production, jewellers estimate.

MARKET COMMENTARY – India is set to grow sharply as a gems and jewellery supplier and market

A typical Indian wedding jewellery suite, by Vasupati Jewellers, seen at IIJS Signature 2024

On the export side, diamonds manufactured or crafted in India, both natural and lab-grown, provide a huge value addition to Indian exports, as most of the world’s diamonds are processed in the country.

The diamond manufacturing industry in India benefits from a combination of cheap labour and the newest, state-of-the-art technologies, such as in the factories in Surat.

The global diamonds market is currently struggling through a downturn, complicated by competition between natural and lab-grown diamonds, but resilient demand for engagement rings will continue to underpin the market.

One of the biggest challenges facing the industry presently is implementation of a G7 ban on import of Russian-origin diamonds.

FOCUS ON WEDDINGS

As well as the dynamic Indian economy, another driver of future jewellery demand will be a new priority of the government, put forward by Prime Minister Narendra Modi, to promote India as a weddings location for couples from around the world, supporting the domestic jewellery, textiles and hospitality industries.

India, supported by organisations such as the state-backed Gem & Jewellery Export Promotion Council (GJEPC), will also work to promote exports of jewellery design as well as product.

Above all though, it is the buoyant energy and passion for jewellery and gemstones, core to Indians’ DNA, that will drive forward this inevitable future growth.

(Disclaimer: Any opinions expressed in this article are solely those of the author and should not be construed as investment advice.)