Export & Global Trade Analysis
Mumbai | Economy India | India’s gems and jewellery sector faced renewed headwinds in December 2025, as global demand weakened amid persistent geopolitical and economic uncertainties. According to data released by the Gems and Jewellery Export Promotion Council (GJEPC), the country’s total gems and jewellery exports declined 4.98% year-on-year to $18.84 billion (₹16,978.44 crore) during the month.
In comparison, exports in December 2024 stood at $19.83 billion (₹16,843.87 crore). The contraction highlights the challenges confronting one of India’s most employment-intensive export sectors at a time when global trade conditions remain fragile.
Global Headwinds Hit Key Export Markets
GJEPC attributed the decline largely to geopolitical tensions, macroeconomic uncertainty, and subdued consumer sentiment in major overseas markets such as the United States, Europe, and parts of West Asia. High interest rates, inflationary pressures, and cautious discretionary spending continued to weigh on demand for luxury products, including fine jewellery and polished diamonds.
Industry experts noted that retailers in advanced economies remained focused on inventory rationalisation, placing limited fresh orders and prioritising liquidity over expansion.
Currency Movements Offer Partial Cushion
While exports declined in dollar terms, the value in rupee terms showed relative stability due to exchange rate movements. Exports in December 2025 amounted to ₹16,978.44 crore, compared with ₹16,843.87 crore a year earlier.
Analysts said that currency fluctuations provided some relief to exporters by protecting margins, though they were insufficient to offset the broader slowdown in volumes and order inflows.
Diamonds and Gold Jewellery Under Pressure
Segment-wise performance indicated:
- Cut and polished diamonds saw muted demand, particularly in the US and European markets
- Gold jewellery exports remained range-bound due to price volatility and cautious buying
- Demand from China and East Asia also remained weaker than anticipated
At the same time, lab-grown diamonds continued to gain traction, though not yet at a scale sufficient to compensate for the slowdown in traditional segments.
Industry Response: Cautious Optimism
Senior officials at GJEPC emphasised that the decline should be viewed as cyclical rather than structural. India continues to hold a dominant position in the global gems and jewellery value chain, supported by skilled craftsmanship, design innovation, and a resilient manufacturing ecosystem.
The council highlighted that exporters are increasingly focusing on:
- Cost optimisation and efficiency improvements
- Exploration of new markets in Latin America, Africa, and ASEAN
- Digital trade platforms and branding initiatives to enhance market reach
Impact on Employment and MSMEs
The gems and jewellery sector is a major source of employment in India, particularly in states such as Gujarat, Maharashtra, Rajasthan, and West Bengal. A prolonged export slowdown could disproportionately impact micro, small, and medium enterprises (MSMEs) and artisan clusters.
Industry bodies have reiterated the need for targeted policy support to safeguard jobs and sustain production capacity during periods of weak global demand.
Policy Support and Industry Expectations
Exporters have called for:
- Cheaper export credit and improved liquidity access
- Reduction in logistics, insurance, and compliance costs
- Faster implementation of free trade agreements (FTAs) to improve market access
Existing government initiatives such as RoDTEP incentives and trade facilitation reforms are expected to provide partial support, though industry leaders believe additional measures may be needed if global uncertainty persists.
Outlook for 2026: Recovery Hinges on Global Stability
Looking ahead, trade analysts expect the sector’s performance in 2026 to depend heavily on:
- Easing of geopolitical tensions
- Monetary policy softening in advanced economies
- Revival in consumer confidence across major importing nations
Emerging segments such as lab-grown diamonds, value-added jewellery, and branded exports are likely to play a larger role in driving medium-term growth.
The 4.98% year-on-year decline in December 2025 underscores the vulnerability of export-oriented sectors to global economic and geopolitical shocks. However, India’s gems and jewellery industry remains fundamentally strong, with deep manufacturing capabilities and global relevance.
As international conditions stabilise, the sector is expected to regain momentum, positioning itself once again as a key contributor to India’s export growth, employment generation, and foreign exchange earnings.
(Economy India)
