Gold Demand Slowdown May Hurt Small Jewellers, Artisan Clusters: GJEPC

Tue May 12 2026

India’s gems and jewellery industry has backed Prime Minister Narendra Modi’s appeal to curb gold purchases amid global economic uncertainties, while cautioning that any prolonged weakness in demand could adversely affect lakhs of MSMEs, artisans and workers linked to the sector.

Industry representatives said a sustained slowdown in gold consumption could disrupt employment and hurt small businesses that form the backbone of India’s jewellery ecosystem.

Highlighting the scale of the industry, Khushboo Ranawat, Chairperson-Western Region at Gem and Jewellery Export Promotion Council (GJEPC) said the sector supports nearly 300,000 businesses, including manufacturers, polishers, stone setters and family-run enterprises spread across major hubs such as Mumbai, Surat, Jaipur, Kolkata and Hyderabad.

At the same time, she acknowledged the government’s concerns over preserving foreign exchange reserves and lowering dependence on imported gold. Ranawat said the industry believes greater emphasis must now be placed on recycling gold domestically to reduce fresh imports.

She added that India already has significant gold reserves in the form of household holdings and temple gold, which could potentially ease import dependence if supported by stronger recycling and monetisation frameworks. According to her, the industry and the government need to collaborate more effectively after earlier gold monetisation schemes failed to gain wider acceptance.

Ranawat further said gold cannot be treated merely as a trade commodity in India because of its deep-rooted cultural significance linked to weddings, household savings and traditions. She noted that rising prices have already pushed gold into the luxury category for many buyers.

The industry, she said, has been adapting to elevated prices by focusing on lightweight jewellery, lower-carat products and increased use of recycled gold, alongside exchange-based purchases.

With the festive and wedding season nearing, Ranawat said the priority should now be to strengthen the domestic jewellery ecosystem with lower import reliance while continuing to support manufacturing, exports, craftsmanship and employment generation. She added that the industry must work collectively to navigate the current challenges.

Source: https://www.businessworld.in/