Gross exports of gems and jewellery have declined for nine months in a row this financial year. It fell by 2 per cent YoY in December to $2,436 million. It had seen a YoY decline of 3 per cent in November. The quantum of de-growth in gross exports in the nine months of FY20 is similar to the previous year of 5 per cent. India exported $27,686 million worth gems and jewellery from April to December 2019.

According to a CARE Ratings report, the industry has been affected by weakening demand from main export nations, stress on working capital operations and reduced lending to small scale players. Further, high gold prices in FY20 constrained domestic jewellery retailers. Lengthy operating cycles and working capital intensive nature of the business is an inherent characteristic of the gems and jewellery industry.

All months of fiscal 2020 have witnessed a decline in gross exports, largely due to fall in international demand for Indian cut and polished diamonds, rough diamonds, coloured gemstones and imitation jewellery. However, there is a strong growth in demand for polished lab grown diamonds, silver jewellery, gold medallion and coins, articles of gold, silver and others, the report added.