Demand Shift Hurts Diamonds, Lab-Grown Segment; Gold Stands
By R. Suryamurthy
India’s gems and jewellery exports saw a significant decline of 15.81% in May 2025, falling to $2.26 billion (₹19,260 crore), according to the Gems and Jewellery Export Promotion Council (GJEPC). The fall comes amid global economic jitters, fresh US tariff concerns, and subdued demand for diamonds, especially from key markets like the US and China.
In comparison, exports had stood at $2.69 billion (₹22,414 crore) in May last year. The sharp drop reflects tightening trade conditions, weak consumer sentiment, and continued uncertainty from geopolitical hotspots including West Asia and Ukraine.
Diamond Segment Suffers Heavy Blow
Cut and polished diamond exports — the largest sub-sector — plunged 35.5% year-on-year to $949.7 million, down from $1.47 billion in May 2024. Similarly, lab-grown diamond exports shrank 32.76% to $80.9 million, compared to $120.3 million a year earlier.
GJEPC Chairman Kirit Bhansali attributed the dip to both slowing global retail demand and the rising shift among consumers towards affordable, sustainable alternatives such as lab-grown diamonds.
Gold Jewellery Defies Trend
Despite the gloom in diamonds, gold jewellery exports jumped 17.24%, reaching $997.5 million (₹8,482 crore) in May, up from $850.8 million in the same month last year. Global uncertainties, especially the Middle East tensions and Ukraine conflict, have boosted gold’s appeal as a safe-haven investment.
“While total exports continued to slide due to tariff fears, gold jewellery saw robust demand in international markets,” Bhansali noted.
Imports, Supply Chains Under Pressure
India’s gems and jewellery imports fell 13% to $1.69 billion in May, compared to $1.94 billion a year ago, revealing a contraction in global demand and cautious inventory management by traders.
- Polished diamond imports dropped 39% to $85 million
- Rough diamond imports dipped 5% to $2.26 billion
Many traders preferred depleting existing stock rather than placing new orders amid tariff-related uncertainty in the US.
Silver and Gemstones Also Slide
The slowdown wasn’t limited to diamonds.
- Silver jewellery exports (April–May) dropped 17.59% to $150.08 million
- Coloured gemstone exports dipped 1.13% to $62.5 million
Bhansali warned that prolonged global tensions and weak retail appetite are likely to keep demand subdued in the near term.
Domestic Gold Trends: Investment Up, Retail Down
While gold remained strong globally — touching $3,435 per ounce in June, a historic high — domestic gold jewellery sales in India were subdued, with consumers restricting purchases to essentials.
This disconnect led to Indian gold trading at a $38 per ounce discount to global prices. However, investment demand surged:
- Gold-backed lending grew 120% YoY to ₹2,230 billion
- ETF holdings nearly doubled to ₹624 billion
Outlook: Festive Season Holds the Key
The industry is now pinning hopes on the August–December festive and wedding season for a recovery. Analysts expect demand revival, especially if gold prices stabilize and tariff risks ease.
According to the World Gold Council, India continues to be the largest private gold holder with 25,000 tonnes worth over $2.4 trillion, reflecting gold’s long-standing cultural and economic value in Indian households.Tall Amid Trade Tensions