New Delhi, 17.06.26: India gold jewellery exports started FY27 on a rough note. A toxic mix of soaring gold prices, restricted raw material availability and policy bottlenecks pushed export shipments sharply lower, creating fresh concerns for one of India’s most important foreign exchange earning sectors.

The numbers aren’t pretty.

India’s plain gold jewellery exports dropped 40.1% year-on-year during April and May 2026, falling to US$635.95 million from US$1.06 billion in the same period last year. For an industry that has long been one of India’s strongest export engines, the decline has triggered alarm across the sector.

India Gold Jewellery Exports Face Severe Pressure

The sharp fall has emerged as the biggest challenge confronting India’s gems and jewellery industry in the opening months of FY27.

Industry stakeholders point to restricted gold availability as a key reason behind the slowdown. Tighter gold imports and disruptions within banking channels have reportedly constrained access to the raw material required to fulfil export orders.

Exporters can’t manufacture jewellery without gold. It sounds obvious. Yet that simple reality has become the industry’s biggest headache.

The impact has already filtered down to factory floors.

Estimated gold consumption for export manufacturing fell to 11 tonnes during April-May 2026, compared to roughly 14 tonnes during the corresponding period last year. That represents a decline of nearly 21.4%, highlighting the direct impact of supply constraints on production activity.

According to Kirit Bhansali, Chairman of the Gem and Jewellery Export Promotion Council (GJEPC), the steep decline in plain gold jewellery exports remains the sector’s primary concern.

The industry has raised the issue of restricted gold availability with the government and is hoping for measures that restore supply and support export-led growth.

Higher Import Duty Adds to Export Challenges

Supply shortages are only part of the story.

Exporters are also grappling with significantly higher input costs following the increase in gold import duty from 6% to 15%.

That jump has substantially increased the landed cost of gold, squeezing margins at a time when global demand remains competitive and price-sensitive.

Industry participants have further argued that duty drawback rates have not been revised to reflect the higher import duty burden. As a result, exporters face an additional profitability challenge while competing against international manufacturers.

In global trade, margins matter. A lot.

When costs rise faster than support mechanisms, exporters inevitably lose some competitive edge.

The concern is particularly significant for India, where the gems and jewellery industry contributes meaningfully to foreign exchange earnings while supporting a large manufacturing workforce.

Studded Jewellery Offers a Bright Spot

Not every category delivered disappointing results.

While plain gold jewellery struggled, studded gold jewellery exports moved in the opposite direction.

Exports from this segment rose 6.7% during April-May 2026, reaching US$964.02 million compared to US$903.37 million during the same period a year earlier.

The growth has been attributed largely to India’s expanding network of free trade agreements.

According to industry leaders, these agreements have improved market access and enhanced the competitiveness of Indian jewellery products in several overseas markets.

In an otherwise difficult export environment, studded jewellery demonstrated that demand still exists when market access and pricing remain favourable.

It’s a reminder that trade policy can sometimes achieve what marketing budgets cannot.

Oman Trade Route Opens New Opportunities

The industry has also welcomed the commencement of jewellery exports to Oman under the India-Oman Comprehensive Economic Partnership Agreement (CEPA).

The development is being viewed as a positive step toward expanding India’s jewellery export footprint in strategic international markets.

Industry leaders are also looking ahead to the possible conclusion of trade agreements with the United States and Canada, which could create additional export opportunities and strengthen India’s global competitiveness.

For exporters searching for growth avenues, new trade corridors may become increasingly important as traditional markets face economic uncertainty and changing consumer preferences.

Overall Gems and Jewellery Exports Also Decline

The weakness wasn’t limited to plain gold jewellery alone.

India’s overall gems and jewellery exports declined 6% during April-May 2026, falling to US$4.27 billion from US$4.55 billion recorded during the same period last year.

Several major segments reported weaker performance.

Cut and polished diamond exports dropped 9% to US$1.87 billion.

Coloured gemstone exports fell 10% to US$55.93 million.

These declines indicate broader challenges across multiple categories within the industry.

However, a few segments delivered encouraging results.

Polished lab-grown diamond exports increased nearly 2% to US$194.78 million.

Silver jewellery exports surged an impressive 172.5% to US$365.77 million.

Platinum jewellery exports also registered strong momentum, climbing 25% to US$41.22 million.

The numbers suggest that consumers in several markets continue to explore alternatives to traditional gold jewellery, particularly amid elevated gold prices.

What the Industry Needs Next

The industry’s message is relatively straightforward.

While supporting efforts to moderate gold imports in the broader national interest, exporters argue that adequate gold availability for export manufacturing remains essential.

The gems and jewellery sector occupies a unique position in India’s economy. It generates employment, earns foreign exchange and contributes to the country’s external trade balance.

Restricting supply too aggressively may solve one challenge while creating another.

Industry leaders believe that restoring smoother access to gold, addressing duty drawback concerns and expanding trade partnerships could help revive export momentum in the coming quarters.

The next few months will likely determine whether the current slowdown proves temporary or evolves into a more persistent challenge for India’s jewellery export ecosystem.

For now, the message from the export data is unmistakable.

India’s gold jewellery industry isn’t facing a demand problem alone. It’s facing a supply problem, a cost problem and a competitiveness problem, all at once.

And that’s a combination no exporter enjoys wearing.

The biggest lesson from these export figures isn’t that global demand disappeared. It didn’t. The growth in studded jewellery, silver jewellery and lab-grown diamonds clearly proves buyers are still spending. The real issue is that India’s plain gold jewellery segment is being squeezed from multiple directions simultaneously. Supply constraints reduce manufacturing capacity, higher import duties raise costs and unchanged drawback structures erode competitiveness. That’s a dangerous combination in any export industry.

If policymakers want export growth, supply chains must remain functional. Moderating imports for macroeconomic reasons is understandable, but export manufacturing requires predictable access to raw materials. The sector doesn’t need subsidies or extraordinary support. It needs consistency. The countries that win export markets are rarely the cheapest. They’re usually the most reliable. India already has the talent, scale and reputation. Ensuring steady gold availability while expanding trade agreements could do more for export growth than any short-term intervention. The warning signs are visible. Ignoring them would be expensive.

— sss