India Gem & Jewelry Exports Down 17% to $38.3 Billion

Cut and polished diamond exports during the period are expected to fall 37.3 percent to $17.1 billion from the $27.2 billion the previous year, according to Gem & Jewellery Export Promotion Council (GJEPC) Chairman Vipul Shah.

Shah attributed the decline to a 2 percent import duty that the government imposed on polished diamonds.

Shah noted however, that Indian exports of polished diamonds to the U.S. would stand at $6.1 billion – higher than exports to that country from Belgium or Israel. India, he said, dominated the U.S. jewelry import basket with a 23.4 percent share.

India is the fastest-growing exporter of jewelry in the world, consistently recording an annual growth of nearly 15 percent over the last decade, according to Shah. Exports of gold jewelry and gold medallions over the current fiscal year are expected to have grown to $18.5 billion from $16.3 billion the previous year.

GJEPC Vice Chairman Pankaj Parekh observed that the high price of gold pushed silver to the forefront as the preferred metal – a trend that he expects would solidify over the coming year. Silver would also gain favor as the metal of choice for investment, he noted. Silver exports are expected to grow by 20-30 percent over the coming year.

Shah expects the gem and jewelry to grow during 2013, noting that the drop in diamond sales had bottomed out and a better market is expected.

The U.S. is expected to be the primary market for Indian gem and jewelry exports over the next year followed by China, other Asian countries and the Middle East, Shah said in reply to a question. Europe, he noted, continued to look uncertain.