India's gem and jewelry exports fell 2% year-on-year to $2.05 billion in May 2026, driven by gold supply constraints and geopolitical uncertainty linked to the US-Iran conflict. For overseas buyers, this signals tighter availability of Indian-made gold jewelry and potential price adjustments, making it critical to monitor sourcing alternatives and regulatory shifts.
Export performance and key drivers
Gem and jewelry exports in May 2026 totaled $2.05 billion, down from $2.10 billion a year earlier. In rupee terms, exports rose 9% to ₹19,574 crore due to currency depreciation. Overall imports dropped 16% to $1.41 billion, reflecting reduced raw material intake. The decline was led by a 15% fall in gold jewelry exports to $758 million, while cut and polished diamond exports grew 3% to $981 million and polished lab-grown diamond exports surged 26% to $101 million.
Gold supply crunch and regulatory hurdles
Kirit Bhansali, Chairman of the Gem and Jewellery Export Promotion Council (GJEPC), attributed the export dip to tightened gold imports and regulatory bottlenecks affecting bank-supplied gold. Gold consumption for export production fell 21% to 11 tonnes during April–May 2026, compared to 14 tonnes a year earlier. The increase in gold import duty from 6% to 15% has raised landed costs, while Duty Drawback rates remain unchanged, squeezing exporter margins.
Two-month fiscal trend and liquidity concerns
In the first two months of fiscal year 2027 (April–May 2026), total gem and jewelry exports declined 6% to $4.27 billion. Plain gold jewelry exports contracted sharply by 40% to $636 million. GJEPC noted a serious liquidity and raw material availability crunch, with elevated gold prices and regulatory issues compounding the challenges. Strengthening exports is seen as vital for India's balance of payments.
What buyers should watch
Overseas importers and private-label buyers should expect continued volatility in Indian gold jewelry supply and pricing. The 26% jump in lab-grown diamond exports signals growing capacity and competitive pricing in that segment. New free trade agreements (FTAs) may open alternative sourcing routes, as noted by Colin Shah of Kama Jewelry. Buyers should also track gold import duty revisions and bank supply normalization in India.
Compliance and logistics signals
Regulatory bottlenecks in gold supply through banking channels and the higher import duty are creating input cost pressures for Indian exporters. This may lead to longer lead times or higher minimum order quantities for gold jewelry. The depreciation of the Indian rupee against the dollar offers some cost advantage for foreign buyers paying in USD, but overall landed costs remain elevated.
Source: Read the original report | Published: June 15, 2026