India Gems & Jewellery Trade
India's gems and jewellery sector sits in a peculiar position — the country is the world's largest diamond cutting and polishing centre (processing 90% of all rough diamonds globally) and a major gold jewellery exporter, yet the sector is almost entirely import-dependent for its raw materials. This creates a processing-and-re-export business model that is highly sensitive to global commodity prices.
Rough diamonds are imported primarily from Russia (Alrosa), Botswana (De Beers), and other African countries. They are cut and polished in Surat — which alone processes an estimated 90% of the world's gem-quality diamonds — and then exported, predominantly to the USA, Hong Kong, Belgium, and the UAE.
Gold imports are the second massive input. India is the world's second-largest gold consumer (after China), driven by wedding demand and investment buying. The government imposes import duties on gold to manage the current account, but gold smuggling rises when duties are too high — a persistent policy challenge.
| Year | Exports | YoY | Imports | YoY | Balance |
|---|---|---|---|---|---|
| FY 2025-26 | $11.4B | -61.9% | $28.2B | -68.3% | $16.8B |
| FY 2024-25 | $30.0B | -8.8% | $89.0B | +13.4% | $59.0B |
| FY 2023-24 | $32.9B | -13.8% | $78.5B | +6.2% | $45.6B |
| FY 2022-23 | $38.1B | -2.9% | $73.9B | -9.5% | $35.8B |
| FY 2021-22 | $39.3B | +50.1% | $81.7B | +47.9% | $42.4B |
- →Surat processes ~90% of the world's gem-quality diamonds
- →USA, Hong Kong, UAE, Belgium are top export markets
- →Lab-grown diamonds (LGDs) are disrupting the mined diamond segment globally
- →Gold imports add ~$40-50B to India's import bill annually
- →Import duties on gold create smuggling incentives when too high
Listed exposure includes Titan Company (jewellery retail), PC Jeweller, Rajesh Exports (gold refining/jewellery), and Kalyan Jewellers. The sector is exposed to gold price volatility, USD/INR, and US consumer demand. Lab-grown diamonds are an existential threat to the natural diamond cutting trade in Surat — a structural headwind for unorganised players.