India currently holds an 8% share of global gems and jewellery exports, excluding raw gold. To expand this, NITI Aayog is pushing for a shift toward high-end design, better branding, and stricter transparency standards. For investors, this marks a potential move toward organized growth and higher value-added products.
The Indian gems and jewellery sector, a significant contributor to the country's export basket, is aiming for a strategic transition to capture a larger portion of the global market. Currently, India accounts for about 8% of global exports when excluding raw gold. Government planning body NITI Aayog has recently highlighted that to move beyond this level, the industry must pivot from simple manufacturing to high-end design and brand-led growth.
Historically, much of India's jewellery industry has functioned as an original equipment manufacturer, or OEM, focusing on cutting, polishing, and manufacturing items based on designs provided by global clients. The new push suggests a shift toward the original design manufacturer, or ODM, model. This means Indian firms are encouraged to develop their own unique designs and branding. For businesses in the sector, this transition is intended to help them command higher profit margins compared to traditional manufacturing, which often operates on thinner margins due to intense competition.
Transparency is another core focus for the next phase of sector growth. As consumer interest in jewellery evolves, distinguishing between natural diamonds and laboratory-grown stones has become vital for maintaining trust. Global industry leaders, including representatives from De Beers Group, have noted that consumer confidence depends heavily on clear standards and traceability. Companies that can provide verified product information are likely to have an advantage in attracting global buyers who prioritize trust and sustainability.
Another major challenge the sector faces is fragmentation. The industry is made up of many small, unorganized units, which can make it difficult to achieve economies of scale or strong collective bargaining power in international markets. Experts suggest that modernized access to finance and improved infrastructure are necessary steps to reduce this fragmentation. As standards for transparency and manufacturing quality rise, organized players may be better positioned to benefit from these changes compared to smaller, unorganized entities. Large groups like Aditya Birla Group and GRT Group are among those already engaged in discussions regarding these structural shifts.
Investors tracking this sector may want to monitor how individual companies adapt to these changes. The shift toward higher-value products and branding requires significant investment in design and marketing. Whether these initiatives successfully translate into higher profitability and increased market share will be the key test for the industry. Other factors, such as raw material price volatility, consumer demand for gold and diamonds in key markets like the US and Europe, and potential regulatory shifts, will continue to play an important role in the sector's long-term performance.