Diamond exports plunge 17% in FY25 amid global headwinds

Kolkata: India’s exports of cut and polished diamonds dropped by 16.75% year on year to $13.29 billion in FY25 — the lowest level since the post-pandemic surge in FY22.

Kirit Bhansali, chairman of the Gem & Jewellery Export Promotion Council (GJEPC), attributed the sharp decline to geopolitical tensions, a slowing US economy, and a complete halt in diamond purchases from China, traditionally the second-largest buyer after the US.

India plays a dominant role in the global diamond supply chain, with nine out of 10 natural diamonds cut and polished in the country, mostly in Surat.

The overall gems and jewellery exports in FY25 fell by 11.72% to $28.5 billion, down from $32.28 billion in FY24, according to GJEPC.

This marks a significant drop from the post-pandemic surge in FY22, when exports peaked at $39.57 billion, driven by revenge buying across the globe.

The year 2024-25 has been particularly challenging for the industry as the Russia-Ukraine and Israel-Hamas wars, and the US slowdown impacted gem and jewellery exports. Also, China completely withdrew from purchasing diamonds due to consumer concern over their resale value.

Gold jewellery exports were the most resilient, registering a marginal decline of just 0.11% to $11.21 billion, GJEPC said.

The export slump has also led to a 24.27% decline in rough diamond imports, which fell to $10.8 billion in FY25 from $14.26 billion the previous year.

Tariff talks:
Bhansali said GJEPC is waiting for the outcome of India’s ongoing tariff negotiations with the US before issuing its outlook for gem and jewellery exports in FY26.

The industry on Monday formally presented its key demands for the proposed India-US Bilateral Trade Agreement (BTA) to the government at a meeting with Shaktikanta Das, principal secretary to the prime minister.

“We urged that import duty on jewellery in US should remain within 10%, which is currently 6% and import duty in US for cut and polished diamonds should continue to remain nil as it is a raw material for use in jewellery manufacturing, which also happens in US,” Bhansali said.

The US government should include it in the Annexure II of goods, which are waived from its reciprocal tariffs, he added.

To address the broader trade imbalance, GJEPC proposed extending to the US the same reciprocal concessions on gold and silver bullion imports that India has offered to the UAE under the Comprehensive Economic Partnership Agreement (CEPA).

The council also urged the government to fast-track duty relief for the gem and jewellery sector under the Early Harvest component of the BTA. With only a three-month grace period before the US imposes a 26% reciprocal tariff on India-made goods, the industry fears a potential standstill if swift action is not taken.

Exports of gem and jewellery

FY20 - $35.59 billion

FY21 - $25.51 billion

FY22 - $39.51 billion

FY23 - $37.74billion

FY24 - $32.29 billion

FY25 - $28.5 billion