India's gem and jewellery exports rose 2.44% to $9.17 billion in the first four months of FY27, as strong growth in gold and silver items offset a decline in diamond trade. This shift underscores a move toward higher-value products. Investors are now watching how upcoming tax incentives for foreign traders could reshape the sector.
India’s gem and jewellery sector is undergoing a structural transition, with exports reaching $9.17 billion during the first four months of the 2026-27 fiscal year. While overall growth was modest at 2.44% in dollar terms, the underlying performance reveals a sharp divergence between product categories. In rupee terms, the performance appeared stronger, with gross exports rising 13.58% to ₹87,078.01 crore, providing a buffer for domestic exporters against global volatility.
The industry is increasingly moving away from traditional diamond cutting toward value-added jewellery. Data from the Gem and Jewellery Export Promotion Council (GJEPC) shows that studded gold jewellery exports jumped 21.09% to $2.24 billion, while silver jewellery exports recorded a significant increase of 72.19% to $508.18 million. This surge in finished, high-value products suggests that Indian manufacturers are successfully capturing a larger share of the global market for ready-to-wear jewellery.
The Diamond Sector Lag
In contrast, the traditional diamond trade continues to face headwinds. Exports of cut and polished diamonds fell 8% to $3.60 billion during the April-July period, down from $3.91 billion the previous year. This decline has acted as a drag on overall export figures and reflects ongoing challenges in global demand for polished diamonds. Coloured gemstone exports also saw a decline of 13.04%. For investors, this creates a clear distinction between companies focused on value-added gold jewellery—which are seeing demand growth—and those heavily dependent on traditional diamond processing, which are experiencing margin and volume pressure.
Policy Triggers and Outlook
Looking ahead, the sector is pinning hopes on both macro-economic factors and legislative changes. The recent easing of gold prices, including a 3.88% dip in July, is expected to provide some relief to demand in key markets like the UAE, Hong Kong, and Singapore. Furthermore, the Taxation and Other Laws Amendment Bill 2026 is emerging as a potential long-term catalyst. The bill proposes a 15-year income tax exemption for foreign companies trading rough diamonds through Special Notified Zones (SNZs). If implemented effectively, this could help India establish itself as a global trading hub for diamonds, potentially reducing dependency on traditional cutting and polishing margins.
Investors tracking the sector should monitor how these policy changes influence long-term trade volumes. The immediate focus will remain on whether the strong demand for studded gold and silver jewellery can sustain its momentum to offset the weakness in diamond exports. The success of orders generated from recent trade shows, such as the IIJS Bharat Premiere 2026, will also provide early signals on export demand for the upcoming quarters.