NITI Aayog launched 7th edition of ‘Trade Watch Quarterly’, providing a comprehensive assessment of global and domestic trade trends. The thematic focus of this edition is India’s Gems & Jewellery sector- examining global demand dynamics, India’s export profile, emerging segments like lab-grown diamonds, and positioning within global value chains.
India’s Overall Trade Performance (April–December FY 2025-26)
India’s total merchandise and services trade grew by 5.3% year-on-year to approximately US$ 1.37 trillion. Exports grew 5.4% slightly outpacing import growth of 5.2%. The services surplus recorded a robust 12.8% y-o-y increase, helping offset the elevated merchandise trade deficit.
Q3 FY 2025-26 (October–December):
- Merchandise exports: US$ 110.48 billion (+1.6% y-o-y)
- Merchandise imports: US$ 202.33 billion (+7.9% y-o-y)
- Services exports: US$ 111.2 billion (+7.8% y-o-y)
- Services imports: US$ 53.7 billion (+2.8% y-o-y)
- Global goods trade recorded ~8% y-o-y growth in Q3 FY 2025-26
Export basket led by electrical machinery, mineral fuels, nuclear reactors, gems & jewellery, and iron & steel — with growth driven by smartphones, engineering goods, and vehicles. Import basket dominated by mineral fuels, gold, electrical machinery, and capital goods.
Trade Diversification Trends
- Geographically: Northeast Asia recorded strong export growth of 5% (driven by China & Hong Kong). West Africa imports rose 59.8% y-o-y. Asia’s share in exports moderated from ~49% to ~40%, while Europe (~22%) and America (25%+) gained share during 2017-18 to 2024-25.
- FTA Partners: Share in total trade rose sharply from 6% (2006) to 28.8% (2024)- a sixfold increase indicating growing regional integration.
- Herfindahl-Hirschman Index (HHI) trend Analysis: India’s exports have become increasingly diversified in both products and regions. Imports remain relatively concentrated in mineral fuels and electronics.
- Trade Complementarity Index (TCI): Improved at HS-2 level (driven by engineering goods, petroleum, chemicals, electronics) but remains stable at HS-6 level — indicating selective rather than broad-based alignment.
Thematic Focus- Gems & Jewellery Sector
Global Market Size (excluding raw gold, 2024): US$ 378.1 billion. Including raw gold, global demand reaches US$ 1.05 trillion- making it the fifth-largest globally traded merchandise segment.
India’s Position:
- India’s exports (excluding raw gold): US$ 29.5 billion– 8% global share
- India’s share in global gems & jewellery exports (including raw gold) declined from 6.1% (2015) to 2.9% (2024)
- Diamonds (HS 7102) and gold jewellery (HS 7113) constitute the core- comprising over 8% of global demand (US$ 207.3 billion); India exports US$ 26.7 billion a 13% share
- In remaining products (46.8% of demand), India’s share is just 2%- highlighting significant export concentration
- India’s Revealed Comparative Advantage (RCA) in diamonds: 5.77 | India accounts for 9% (US$ 12.3 billion) of global diamond demand
- Trade Complementarity Index (TCI) with world fell from 8 (2001) to 25.1 (2024) — indicating declining alignment with global demand
Sector’s Domestic Importance:
- Contributes ~2% of total manufacturing output and ~7% of GDP
- Employs approximately 50 lakh workers (as of 2022-23)
- 3rd largest import item and 4th largest export item for India
Geographic Concentration:
- US, UAE & Hong Kong account for ~70-75% of India’s exports. UAE, Switzerland & Hong Kong supply over 60% of imports.
Emerging Opportunities:
- Platinum, scrap & waste of precious metals, and silver — recording strong CAGR of 6-7%, collectively representing a world market of US$ 103 billion.
Key Challenges:
- Seasonality of export demand, credit gap due to lack of trust from financial institutions, lack of granular sector data, and limited adaptability towards low-carat jewellery preferred in foreign markets.
Policy Suggestions:
- Increased capacity utilisation of specialised clusters, targeted branding & promotion of GI products, inclusion of consignment exports for FTA duty benefits, improved data reporting, enhanced access to finance through credit guarantees and interest subvention, and establishment of Centres of Excellence for skill development.