Sectoral report on India's gems and jewellery industry. This is a sectoral report that examines and analyses the industry's credit, employment, GVA, and so on.

1. Gems &
jewellery
Sectoral report
(INDIA)
1

2. Objectives &
Methodology
1
Objectives
 1. Effect of Interest rate on GDP, GVA (gems and jewellery), employment and credit
 2. To identify growth drivers for the industry
Methodology
 We have collected employment, credit, GVA of industry from CMIE,RBI,CRISIL and further looked at
GJEC and GJC, IBEF reports to further gather data on the industry.

3. Industry Overview 2
Gems and Jewellery industry is divided into 5 segments: Cut and Polished
diamonds, Gold Jewellery, Silver Jewellery, Rough diamonds and others.
In cut & polished diamonds, India ranks first among the top exporters. India
ranks second in gold jewellery, silver jewellery and lab-grown diamonds.
By 2022, over 8 million people likely to be employed by the sector (was around 5
million in 2020). The contribution of India’s Gold and Diamond trade is around
7.5% to India’s GDP and 14% to India’s total merchandise exports.
Exports: US$ 35 billion in 2020. By 2025, it is expected to be US$70 Billion. There
was a growth of 45.2 % during October 2021 but it declined by 4.21 per cent in
November 2021.
Source: IBEF
Commodity Units Price Volume Expiry
Gold 10g ₹ 47,452.00 3746 04-Feb-22
Silver 1kg ₹ 60,607.00 9443 04-Mar-22
Source: MCX (as on 10-01-2022)

4. Repo rate 3
 The central bank has kept the repo rate — the rate at which the RBI lends funds to banks —
unchanged at 4 per cent and the reverse repo rate — the rate at which RBI borrows from
banks — at 3.35 per cent.
 The unchanged repo rates are aimed to maintain the status quo on the prevailing low
interest rate regime for some more time. This works well for borrowers as the environment of
affordability will continue.
 The banking sector is showing signs of revival, with credit offtake rising. In November, bank
credit growth reached the rate seen just before the pandemic. Credit to lagging sectors, such
as industry and services, is also up.

5. 4
• INRPYLDP index -> repo rate
• IGQNPFC index -> GDP in
million crore
GDP and Repo Rate

6. 9,693.50
13,867.20
10,883.40
15,179.80
4,385.60
13,787.60
12,921.50
15,368.80
12,378.20
1,767.00
11,160.50
18,045.90
17,090.10
8,213.90
19,029.50
0.00
2,000.00
4,000.00
6,000.00
8,000.00
10,000.00
12,000.00
14,000.00
16,000.00
18,000.00
20,000.00
Mar-18
May-18
Jul-18
Sep-18
Nov-18
Jan-19
Mar-19
May-19
Jul-19
Sep-19
Nov-19
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
GEMS & JEWELLERY QUARTERLY GVA (Rs.Million)
Q4 2018 Q4 2019 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
₹67,978.00
₹60,452.00
₹62,988.00
₹62,713.73
₹60,158.13
₹69,597.81
₹70,140.81
GEMS & JEWELLERY QUARTERLY CREDIT (RS.
CRORE)
5
Source: CMIE Source: RBI

7. 1,371,524
1,523,172
1,502,127
1,482,180
1,329,469
1,400,779
1,174,699
1,307,180
1,080,3391,088,995
807,496
1,205,466
1,164,940
1,259,527
1,115,871
1,070,891
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
1,300,000
1,400,000
1,500,000
1,600,000
Mar-18
May-18
Jul-18
Sep-18
Nov-18
Jan-19
Mar-19
May-19
Jul-19
Sep-19
Nov-19
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
GEMS & JEWELLERY QUARTERLY EMPLOYMENT
160,262.50
215,544.50
186,341.90
192,312.70
204,937.30
200,168.00
215,269.90
221,924.20
189,817.00
35,576.40
86,354.50
145,992.00
145,346.70
82,173.60
136,464.80
0.00
50,000.00
100,000.00
150,000.00
200,000.00
250,000.00
Mar-18
May-18
Jul-18
Sep-18
Nov-18
Jan-19
Mar-19
May-19
Jul-19
Sep-19
Nov-19
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
GEMS & JEWELLERY NET INCOME (Rs.Million)
6
Source: CMIE
Source: CMIE

8. Growth Drivers and Government
Initiatives. 7
Population Demographics
•Middle class population expected to increase to 1,250 million in 2048
•Rich population is expected to increase to 310 million in 2048 from 30 million in 2018
Rising demand
•Increase in middle class population and demand.
•Further , India’s demand for jewellery has rebounded 33% y-o-y to 443 tonne and is
expected to further grow as global economic recovery occurs. (according to WGC)
Government Initiatives
•Import duty on gold and silver reduced from 12.5% to 7.5%.
•Change in definition of MSMEs. Medium enterprises now include units with
maximum turnover of Rs 250 crores excluding exports.
• Rs 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) introduced for
MSMEs during Budget 2021, expanded to 27 stressed sectors including Gems and
Jewellery.

9. Outlook 8
• According to UNCTAD Report , October 2021, India is expected to record a growth of 7.2% in
2021 and 6.7% in 2022.
• The strong recovery (refer appendix)->
• massive central bank actions in advanced economies,
• unprecedented government spending, rapid policy interventions, and vaccine roll out in
advanced economies,
• which led to financial market stabilisation and cushioned firms and households during the
pandemic.
• Strong global demand in key gems (esp. US, China) -> growth driver of export growth.

10. Appendix 9

11. Appendix 10

12. References 11
• Gem & Jewellery Trade Trends - Gjepc.org. https://gjepc.org/pdf/Gem-and-
Jewellery-Trade-Trends-half-Report-April-september-2021.pdf.
• World Gold Council. “Gold Demand Trends Q3 2021.” World Gold Council,
World Gold Council, 28 Oct. 2021,
https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-
trends-q3-2021.
• “Industry Report.” IBEF, https://www.ibef.org/industry/gems-jewellery-
india.aspx.