While gold jewellery will continue to be highly sought after in India, exporters need to expand their global reach to support long-term growth and stability, according to the World Gold Council (WGC).

Nearly 90 per cent of India’s gold jewellery exports go to just five destinations – the United Arab Emirates, the US, Hong Kong, Singapore and the UK. “Looking ahead, there is a greater need for Indian gold jewellery exporters to develop new markets,” a recently published WGC research revealed. 

India is the world’s second-largest consumer of gold jewellery, with weddings and festivals as main drivers of growth. Bridal jewellery alone accounts for 50 per cent to 55 per cent of the market share.

Plain gold jewellery meanwhile holds an 80 per cent to 85 per cent market share, the majority of which is 22-karat items although the market for 18-karat jewellery is growing.  

India’s gold jewellery exports have likewise flourished, rising from US$7.6 billion in 2015 to US$12.4 billion in pre-pandemic 2019. The country remains one of the world’s largest exporters of gold jewellery and in recent years, the US has surpassed the UAE as the largest export destination for Indian gold jewellery. 

“This reflects two developments. First, the imposition of extra tariffs on Chinese jewellery exports to the US, which has made Indian exporters more competitive and, second, the implementation in the UAE of a 5 per cent import duty in January 2017 and 5 per cent Value Added Tax (VAT) in January 2018, both of which negatively impacted competitiveness,” explained WGC.

The export sector is poised to grow further, thanks to proposals that will allow advance payments to overseas precious metal suppliers, as well as the formation of the mega-CFCs (Common Facility Centres) in the Santacruz Electronics Export Processing Zone (SEEPZ) of Mumbai and Surat.

“Over the long term, gold jewellery demand in India will be driven by developments in economic growth, income growth and wealth distribution, as well as the rate of urbanisation,” added WGC.