Fragmented MSME Base And Credit Gap Among Issues Weighing On Gems & Jewellery Sector: Niti Report

New Delhi, Apr 21 (KNN) Limited value addition due to a fragmented MSME base, heavy reliance on imported inputs and credit gap are among the issues weighing on the country's labour-intensive gems and jewellery sector, as per the latest edition of Trade Watch Quarterly released by government think-tank Niti Aayog.

The report said that addressing these issues will require a strategic push towards higher value addition, diversification into emerging segments, better access to finance and raw materials, and investmentment in technology as well as skill.

It also called for development of a more integrated and globally competitive ecosystem.

As per the periodic publication, India’s export strength in the gems and jewellery sector remains concentrated in diamonds and precious metal jewellery, which together account for over half of global demand pegged at USD 207.3 billion. In these segments, India has achieved a strong global presence, with exports of USD 26.7 billion, with Surat in Gujarat emerging as the world’s largest cutting and polishing hub.

The analysis highlighted that India’s trade structure in the sector is characterised by high product and market concentration. 

"Exports are largely directed towards a few key markets, notably the United States, UAE, and Hong Kong, while imports are concentrated in a limited number of suppliers for raw materials," the report said.

As per the Trade Watch Quarterly, India’s trade performance in October-December period (Q3) of 2025-26 reflected a mixed but resilient trend, with merchandise exports registering modest growth of 1.6 Per cent while imports rose at a faster pace of 7.9 Per cent. In contrast, services exports grew strongly by 7.8 Per cent, with relatively moderate growth in services imports, resulting in a sustained surplus that continued to anchor the overall external balance.

The publication which provides a comprehensive assessment of global and domestic trade trends was released by Suman Bery, Vice-Chairman, NITI Aayog.

The thematic section of the publication focuses on India’s gems and jewellery sector. The section provides insightful information on India’s export profile, emerging segments such as lab-grown diamonds, and its positioning within global value chains. It has also detailed structural constraints, evolving demand patterns, and policy priorities required to strengthen competitiveness and enhance export performance.
 
(KNN Bureau)