The jewelry and gemstones industry saw a sharp decline in May because of a steep fall in gold prices. Due to low availability and high costs, besides lack of global demand, there was a drop of 2% in the country's export by gems and jewelry industry, to $2.05 billion as compared to $2.10 billion last year.

Measured in rupees, the decline in exports was even more. There was a drop of 9% to ₹19,574 crore from ₹17,896 crore in May last year. Industry experts feel that exchange rate fluctuations between the rupee and the dollar besides limited availability of gold affected the exports.

Kirit Bhansali, Chairman, Gem and Jewellery Export Promotion Council (GJEPC) attributes the primary reason for the export decline to stringent restrictions on gold imports, thereby affecting the availability of gold for export.

According to data, gold consumption for export production declined by 21% to 11 tonnes during April-May 2026, compared to 14 tonnes in the same period last year. This directly impacted jewelry manufacturing and exports.

However, cut and polished diamonds saw some relief. Exports in this category increased by 3% to $981 million. Exports of polished lab-grown diamonds jumped 26% to $101 million. In contrast, gold jewelry exports fell by 15% to $758 million.

The sector's performance remained weak in the first two months of the current financial year. Total gems and jewelry exports declined by 6% to $4.27 billion during April-May. In rupee terms, this marked a decline of 4%, reaching ₹40,399 crore.

Meanwhile, gems and jewelry imports also declined by 13% to $3.25 billion. The largest decline was seen in ordinary gold jewelry imports, which declined by 40%.

The GJEPC expressed concern that regulatory constraints on the availability of gold through banking channels have increased. Furthermore, the sharp rise in gold prices and the increase in import duty from 6% to 15% have significantly increased costs.

The industry body states that rising costs, limited gold supply, and outdated duty drawback rates are putting pressure on exporters' competitiveness and profitability.

The sector believes that if the constraints related to gold supply are not resolved soon, then pressure on gems and jewellery exports may continue in the coming months.