India’s exports of gems and jewellery, one of the largest categories in its export basket, have declined to their lowest levels in three years, ending FY24 with a significant drop. According to data from the commerce ministry’s Niryat portal, gems and jewellery exports stood at $32.71 billion during FY24, down from $37.96 billion in FY23 and $38.94 billion in FY22. The pandemic had a severe impact on the industry, leading to a sharp drop in exports, which fell to $3.86 billion in FY19 and $4.32 billion in FY20. However, the sector showed signs of recovery in FY21, with exports reaching $26.02 billion. Despite setting an ambitious export target of $40 billion for FY24, the industry faced challenges due to a downturn in key markets like China and the US. Rising inflation and interest rates have further contributed to the decline.
The global economy has been grappling with rising inflation and high-interest rates, particularly in Europe and the US, which are India’s biggest export markets. However, there are signals that some of these factors might ease this year. India imports rough diamonds since it doesn’t produce these commodities in any significant quantity. It exports gems and jewellery, making value additions in the process. India’s gems and jewellery exports to the North American region stood at $10 billion in FY24, while exports to North East Asia, including China, stood at $7 billion, down from $13 billion and $9 billion in the previous year (FY23).
Meanwhile, India’s overall trade deficit, including merchandise and services, shrank to $78.12 billion in FY24 from $121.62 billion in FY23. The World Trade Organization (WTO) expects global goods trade to have recovered gradually during 2024, following a downturn in 2023 due to high energy prices and inflation. As economic pressures ease and incomes rise, the volume of global merchandise trade is anticipated to increase by 2.6% in 2024 and 3.3% in 2025, as per the WTO’s Global Trade Outlook and Statistics report released in April. However, the report also highlights that regional conflicts, geopolitical tensions, and economic policy uncertainty pose substantial downside risks to the forecast.
