India’s gem sector regains shine beyond US as exporters pivot to Asia, Middle East
India’s gem and jewellery exports, among the country’s biggest earners, are rebounding in ways that reflect a successful push to diversify trade away from the United States amid higher tariffs and a tougher global trade environment, analysts and industry executives have said.
The industry’s shipments rose 19.64 per cent year on year to US$2.51 billion in November, even after Washington imposed tariffs of up to 50 per cent on Indian goods – a move that had initially raised fears of a sharp hit to one of the country’s biggest export sectors.
Industry executives caution that the November jump partly reflects delayed shipments following the Diwali holiday in October, but say the underlying trend points to gradual stabilisation driven by stronger demand from alternative markets in Asia and the Middle East.
Shipments rose to US$2.51 billion from US$2.10 billion a year earlier, according to figures from the Gem and Jewellery Export Promotion Council (GJEPC).
The rebound followed a subdued October, when production and dispatches slowed because of the Diwali festival, with some exports deferred to November, GJEPC Chairman Kirit Bhansali told This Week in Asia.
Diwali, India’s biggest festival season, shifts each year under the Hindu calendar and usually falls between October and November.
Even so, gem and jewellery exports from April to November stood at US$18.87 billion, marginally higher than US$18.85 billion a year earlier, suggesting stabilisation despite a challenging global trade environment.
“This broad-based performance underscores the effectiveness of India’s market diversification strategy, which is expected to support sustained momentum going forward,” Bhansali said.
Growth has been led by several international markets.
Exports to the United Arab Emirates rose 32.4 per cent to US$6.25 billion, while shipments to Hong Kong increased 22.72 per cent to US$3.78 billion.
Other destinations also recorded gains, including Australia at 35.79 per cent, Thailand at 16.85 per cent and Israel at 10.45 per cent, reflecting a broader rebound across parts of Asia and the Middle East.
Bhansali was optimistic about exports to markets like Hong Kong.
“This consistent growth reflects steady demand and reinforces Hong Kong’s role as a key trading and re-export hub. Given the continuity in demand patterns, this performance appears sustainable in the near to medium term,” he said.
According to Bhanasali, collaborative efforts by GJEPC and De Beers, in partnership with Chow Tai Fook in mainland China, are expected to further strengthen consumer sentiment and revive interest in natural diamonds, complementing the broader recovery under way across Asia and the Middle East.
India is the world’s largest exporter of diamonds due to its dominance in gem cutting and polishing, covering 90 per cent of the world’s rough diamonds. While not a major producer, India imports raw diamonds and re-exports them as finished, polished stones.
The latest trade data is significant, given that the US in recent years has been India’s largest market for gem and jewellery exports. US President Donald Trump’s decision to impose steep tariffs was initially seen as a huge setback for the sector for the peak holiday season demand.
Bhansali said he was hopeful that India would still sign a bilateral trade agreement with the US to boost gem and jewellery exports, particularly diamonds.
“Discussions are taking place at the highest levels, and the industry has full confidence in the government of India that outcomes will be in the country’s best interest,” he said.
However, the gem and jewellery industry had also been proactively preparing for “various scenarios” and GJEPC had been engaging closely with members to ensure readiness and resilience, he said.
“At the same time, Indian exporters are accelerating diversification into newer and alternative markets, which is helping mitigate risks and sustain export momentum,” Bhansali said, adding that the industry was working with the government to support exporters and ensure long-term growth.
Broader trade realignment
Economists say the gem and jewellery industry’s export strategy is in line with a broader realignment happening in India’s exports to reduce dependence on the US.
“This is becoming more of a norm now. Every industry is trying to diversify. After all, this amount of dependence on one market in an uncertain world is not really the best way forward,” said Biswajit Dhar, an economics professor at New Delhi’s Council for Social Development.
The US is India’s largest export market, receiving about 18 per cent of India’s total goods exports, making it a crucial destination for Indian products like gems, jewellery, pharmaceuticals and electronics.
Dhar said the prospect of a bilateral trade agreement between the US and India appeared uncertain, with Washington’s push to open sensitive sectors such as agriculture and dairy a political hot potato for Delhi as it could invite farmers’ backlash.
At the same time, he noted that Trump’s voter base among farmers meant it was not easy for him to concede ground on agriculture and dairy.
As part of its strategy to diversify, India has embarked on a spree of trade negotiations with other countries, including free-trade agreements with the United Kingdom, Oman and New Zealand. Another such agreement is expected with the European Union.
Dhar also noted that a recent steep fall in the rupee’s value was giving Indian exporters an edge in other markets.
“India was caught on the wrong foot because of its huge dependence on US markets. If we are able to reduce this dependence, then the heat on India goes down,” Dhar said.
Source: https://www.scmp.com/