India’s gem and jewellery exports reached $9.17 billion between April and July 2026, a 2% increase driven by strong demand for studded gold and silver jewellery. While value-added segments grew, the traditional cut and polished diamond trade declined by 8%. Meanwhile, the new Taxation and Other Laws (Amendment) Bill 2026 aims to boost the sector by offering tax breaks for rough diamond trading.
India's gem and jewellery exports showed mixed results in the April–July 2026 period, with total exports rising 2% to $9.17 billion. While overall numbers moved higher, the performance varied significantly across different product segments. Investors and market watchers are noting a clear shift in the industry, where demand for value-added products like studded gold and silver jewellery is helping to offset the ongoing pressure on the traditional cut and polished diamond business.
Segment Performance and Shift in Demand
The growth in exports has been largely supported by a surge in high-value categories. Studded gold jewellery exports jumped by over 21% to $2.24 billion, while silver jewellery exports saw a massive increase of 72%, reaching $508 million. These gains reflect changing global consumer preferences, where there is a stronger appetite for finished, wearable jewellery compared to loose, polished diamonds. Conversely, the traditional diamond segment remains under pressure, with cut and polished diamond exports falling by 8% to $3.60 billion. This decline highlights a persistent challenge for the country's diamond cutting and polishing hubs, which have faced a tougher global economic climate.
Regulatory Boost for Rough Diamond Trade
To address long-standing structural issues, the government recently passed the Taxation and Other Laws (Amendment) Bill 2026. This legislation is a significant development for the sector as it provides a 15-year income tax exemption for foreign companies trading in rough diamonds through India’s Special Notified Zones. Previously, Indian firms relied heavily on imports for rough diamonds, which often created supply chain complexities. By making it easier and more tax-efficient for global mining companies to trade directly through these zones, the government aims to lower the cost of operations and strengthen India's position as a global diamond trading center.
Risks and Sector Outlook
Despite the growth in gold and silver jewellery, the sector faces several risks. Global economic uncertainty and geopolitical tensions continue to affect export demand in key markets like the US, UK, and various Asian countries. Furthermore, while the easing of gold prices in July 2026—when prices fell by nearly 4%—provided some temporary support for demand, price volatility remains a threat to steady trade. For companies in this space, the primary challenge remains managing profit margins amid fluctuating raw material costs and cooling demand for non-essential luxury items. Investors should watch how effectively the industry utilizes the new tax exemptions to improve its supply chain and whether the trend toward value-added jewellery can sustainably cover the decline in traditional diamond exports.