I ndia’s gross exports of gems and jewellery grew 5% to I2,77,450.34 crore in the fiscal year 2018- 19 (FY19) in comparison with I2,64,046.36 crore in 2017-18 (FY18), according to the annual export performance report released by the Gem & Jewellery Export Promotion Council (GJEPC). However, in dollar terms, gross exports of gems and jewellery dropped 3% to $39.68 billion in FY19 compared with $40.96 billion in the previous year.
India’s exports of cut and polished diamonds grew 9% to I1,66,573.11 crore in FY19 as against I1,52,908.73 crore in FY18. In dollar terms, exports of cut and polished diamonds increased 0.39% to $23.81 billion in FY19 from $23.72 billion in FY18.
In volume terms, cut and polished diamond exports dropped 13% to 30.28 million carats in FY19, as compared to 34.86 million carats in FY18.
The major export destinations for Indian cut and polished diamonds were the US (+8%), Hong Kong (-6%), Belgium (+0.18%), the UAE (-16%), Israel (+3%), Thailand (+8%), Japan (+52%), the Netherlands (+14%), Switzerland (+13%), China (+34%), the UK (+5%) and Others (+5%).
Pramod Agrawal, chairman, GJEPC, said, “Despite all the macroeconomic and geopolitical challenges, India’s exports of gems and jewellery in FY19 have shown positive growth thanks to the initiative and enterprise of our exporters. The strong double-digit growth in gold jewellery exports is heartening.
“The industry has been facing challenges like the credit crunch due to lenders tightening norms for sanctioning of funds. The levy of IGST on re-import consignments is also a factor that has been impacting the trade. Moreover, the trade witnessed an increase in the import duty of cut and polished diamonds and other precious stones from 2.5% to 7.5%. GJEPC has represented trade concerns and issues to the government. We are hopeful that the government will support us as it has always done in the past in creating an environment conducive to business growth.”
Exports of gold jewellery (DTA and SEZ-EPZ) increased by 35% to I84,004.86 crore in FY19 as compared to I62,381.21 crore in FY18. In dollar terms, gold jewellery exports were $12.03 billion in FY19, up 24% versus $9.67 billion in FY18. India’s main jewellery export destinations were the US, UAE, Singapore, Hong Kong, the UK, Australia, Qatar, Malaysia, Canada, Switzerland and China. India is the biggest exporter of jewellery to the US, catering to 16% of the market’s annual demand.
Some of the factors that affected the growth of India’s gem and jewellery exports in FY19 are as follows:
- Liquidity remained tight due to shrinkage of bank funding to the sector. Banks demand high collateral security, high charges and interest rates, which has resulted in a liquidity crunch for exporters.
- Working capital blockage due to delay in GST refunds.
- Stoppage of replenishment scheme is a hurdle for small and medium jewellery exporters.
- GJEPC also seeks reduction in import duty on gold.
- The levy of IGST on re-import consignments is a barrier.
- The hike in import duty on cut and polished diamonds and other precious and semi-precious gemstones from 2.5% to 7.5% resulted in a decline in the manufacturing activity of cut and polished diamonds and thereby a decline in exports.
The exports of costume and fashion jewellery increased 13% to I469.53 crore in FY19 as compared to I414.86 crore in FY18. In dollar terms, exports of costume and fashion jewellery reached $67.49 million, up 5% versus $64.35 million in FY18.
Exports of gold medallions and coins were I6,126.08 crore (in dollar terms $876.40 million); coloured gemstones were I2,783.75 crore (in dollar terms $396.89 million); silver jewellery was I5,907.05 crore (in dollar terms $837.81 million); and synthetic stones were I1,582.28 crore (in dollar terms $225.70 million).
The total Indian import of gems and jewellery fell 9% to I1,83,983.31 crore in FY19 as compared to I2,03,022.77 crore in FY18. Imports in dollar terms amounted to $26,405.39 million, down 16% as compared to $31,498.68 million in FY18.
The imports (provisional) of rough diamonds were I1,09,523.79 crore, down 10% as against I1,21,744.54 crore in FY18. Rough diamond imports in dollar terms of $15,724.24 million were down 17% compared to $18,888.64 million in FY18. Meanwhile, the volume of rough diamond imports dropped 12% to 165 million carats in FY19 as compared to 187.6 million carats in FY18.