National News

Indian diamond industry faces continued struggles amid demand slump and tariff woes: ICRA

Published

12 months ago

June 27, 2025

India’s cut and polished diamond (CPD) industry is set for another challenging fiscal year, with the recent report ICRA projecting a 7-10 per cent decline in exports in FY2026, following a 17% contraction in FY2025, weighed down by weak global demand and increasing competition from lab-grown diamonds (LGDs), the sector’s outlook remains negative.

The report by ICRA indicates CPD exports fell to a 20-year low of USD 13.3 billion in FY2025, impacted by a global macroeconomic slowdown and a growing consumer preference for cheaper, ethically sourced LGDs. These now constitute 8% of polished diamond exports, up from just 1% in FY2019.

Additionally, the recent imposition of a 27 per cent reciprocal tariff by the US, a key market accounting for over a third of India’s CPD exports, adds further pressure. Although currently paused with a 10 per cent interim tariff, exporters remain wary. Many are rerouting shipments through low-tariff hubs like Dubai and Belgium to mitigate the impact.

ICRA’s report also highlights that operating profit margins for CPD firms fell by 400 basis points in FY2025 to approx. 4 per cent, with ICRA predicting a further dip to 3.6-3.7 per cent in FY2026. The working capital cycle also remains stretched, burdened by high inventory amid declining sales and cautious rough diamond procurement.

Meanwhile, prices for both rough and polished diamonds have dropped sharply, by 8 per cent and 7 per cent respectively in FY2025, while production cuts from miners like De Beers are expected to keep rough prices range-bound.

Despite minor optimism for a recovery in bridal jewellery demand in the US in H2 FY2026, sustained weakness in Chinese demand and intensifying LGD competition continue to cloud the outlook. The CPD industry may need to adapt more aggressively to shifting consumer trends and tariff realignments to regain momentum.

On the bottom line, ICRA says the credit profile of Indian CPD entities is expected to remain weak in FY2026, characterised by modest earnings and a continued stretched working cycle.

National News

FTA Partner Markets Offer Immense Export Opportunity For Indian Jewellery Sector: DoC

Department of Commerce Organises Focused Outreach To Boost FTA Utilisation in the Gems & Jewellery Sector

Published

2 hours ago

June 10, 2026

JewelBuzz Spread The Buzz

India’s FTA partner countries collectively import over US$55 billion of jewellery annually; India’s current share of US$8 billion signals a large untapped opportunity.

Exporters urged to leverage preferential market access under India’s FTAs and capture a greater share of global jewellery trade.

The Department of Commerce, Ministry of Commerce & Industry, Government of India today organised a focused outreach programme on “Leveraging FTAs for the Gems & Jewellery Sector” in Jaipur, in partnership with the Gems & Jewellery Export Promotion Council (GJEPC). Exporters, manufacturers, MSMEs and other industry stakeholders participated in the programme.

The workshop is part of the Government’s sustained effort to ensure that exporters—particularly MSMEs and cluster-based enterprises—can fully capitalise on market access gains created through India’s new-generation FTAs.

India’s total exports have nearly doubled over the past twelve years, reaching an all-time high of USD 863 billion in FY 2025–26—up from USD 468 billion in FY 2014–15. Merchandise exports stood at USD 442 billion and services exports at USD 421 billion, reflecting the resilience and competitiveness of the Indian economy.

India’s FTAs have grown broader, deeper, and commercially more meaningful in recent years—covering a wider range of products, services, investment, standards, and trade facilitation. Gems & Jewellery has emerged as a leading beneficiary sector under these agreements.

FTA partner countries collectively import over US$55 billion of jewellery annually. India’s current share stands at US$8 billion—pointing to substantial headroom for growth. Rajasthan, which accounts for 97% of India’s coloured gemstone exports and has a strong presence in silver and imitation jewellery, is uniquely placed to capture this opportunity.

Addressing the gathering, Saket Kumar, Joint Secretary, Department of Commerce, said:

“India’s FTAs are strategic instruments for expanding export opportunities. Our objective is to ensure that every exporter, including MSMEs and cluster-based enterprises is equipped to utilise them.”

The programme aligns with the vision of Hon’ble Commerce and Industry Minister Piyush Goyal, who has underscored that India’s export growth strategy rests on enhanced competitiveness, improved market access, and stronger domestic manufacturing. Achieving the target of USD 2 trillion in exports by 2030 will require industry stakeholders to fully leverage the opportunities created by India’s expanding FTA network.

The Department of Commerce will continue similar engagements across key export clusters to ensure wider dissemination of FTA-related opportunities and help make India a leading global manufacturing and export hub under Viksit Bharat 2047.