According to the Credit Rating Information Services of India Limited (CRISIL), the revenue growth in the gems and jewellery industry is expected to slow down this fiscal year, with export demand falling for the second consecutive year due to a slowdown in key markets. Domestic demand, however, remains positive.
In the fiscal year 2023, while financial information of the Small and medium enterprises (SMEs) is yet to flow in, the revenue of domestic players has slowed down following an increase in gold prices and that of exporters has fallen due to a drop in demand for cut and polished diamonds.
In fiscal year 2024, exports of cut and polished diamonds, which constitute over 60 per cent of India’s gems and jewellery exports, are set to fall for the second consecutive year after declining 10 per cent in dollar terms in fiscal year 2023 and by almost a third during the first two months of the current fiscal year.
Meanwhile, recessionary pressures in the US, the largest market for cut and polished diamonds, are likely to impact demand and, in turn, revenue and profitability. SMEs in this industry are more susceptible to fluctuations in the end-user market and are expected to be affected severely.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished
