India’s Gem and Jewellery sector is one of the largest in the world. It contributes to around 29% of global jewelry consumption. Indian’s have always been connoisseurs of precious stones and ornaments. Continuity of traditional craft was ensured by jewelry makers by transferring trade secrets over generations. Today, India is the largest cutting and polishing center in the world. This is a labor-intensive sector which contributes to 15% of the country’s overall exports. As per records, during the first quarter of 2020-21 gold jewelry exports declined by 79 percent to $ 321.24 million.
India’s top export destinations for gems and jewelry are the US, Europe, Japan, and China. Almost one-fourth of India’s total gems and jewelry export accounts for the US. But in the month of March, the exports of gem and jewelry declined drastically, ie, 43% to $1.86 billion against $3.23 billion in the same period last year, as a result of a decline in demand due to COVID-19 outbreak. According to the Gem and Jewellery Export promotion council(GJEPC) exports again contracted by 34.72 % to $1.64 billion, in April-June. Last year in June exports stood at $2.52billion.
According to GJEPC chairman, the steady decline in exports is due to a reduction in demand which is the impact of economic slowdown and restrictions made in countries to control the pandemic. He also added this sector requires special government attention and special packages to help exporters to revive the situation.
Even though exports of gold jewelry and gems contracted, an increase in the export of silver jewelry is noted. Its exports rose to $324.59 million during the period from $168 million in April-June 2019-20.
Reduction in exports of jewelry and colored gems saw a reduction in shipments too. outbound shipments of colored gemstones contracted 80.56 percent in the last fiscal. Well, the impact was not on exports alone it also affected imports. Imports of gems and jewelry dipped by 74.81% to $915.14 million during the quarter. The import of rough diamonds also reduced by 82.7% to $481.65.
Industry experts recommend the implementation of a risk management system to ensure ease of doing imports and exports. And to set up common facility centers (CFC) and mega facility centers (MFC) for MSME’s to use capital intensive modern technology.