India shines brightly despite facing a whirlwind of events in 2023. With record-high gold prices, fluctuating diamond rates, and global tensions, the industry navigated through choppy waters while maintaining its dominance in exports.
The latest India Development Update by the World Bank paints a promising picture, with India emerging as one of the fastest-growing major economies in FY 2022/23, boasting a growth rate of 7.2 per cent. Forecasts suggest continued growth, with a projected expansion of 6.3 per cent in FY 2023/24.
India’s gems and jewellery exports soared to USD 37.73 billion in 2022-23, reaffirming its position as a global leader in the industry.
Gold prices have been on an upward trajectory, defying expectations as they reached unprecedented levels in both domestic and global markets.
Factors such as the weakening dollar, expectations of interest rate cuts by the US Federal Reserve, and China’s growing demand for gold have contributed to the surge in prices.
Recently, gold prices have surged unexpectedly, defying conventional wisdom as they typically move inversely to the stock market.
Interestingly, both gold and stocks are currently reaching record highs. In India, gold has surpassed Rs 70,000 per 10 grams, while globally, it has exceeded USD 2,285.
Several factors contribute to this phenomenon. Firstly, the weakening of the dollar has made gold more appealing. Since gold is priced in dollars worldwide, its value tends to increase when the dollar depreciates.
Moreover, anticipation of interest rate cuts by the US Federal Reserve has heightened gold’s attractiveness as an investment. Lower interest rates typically lead investors to seek refuge in gold, further bolstering its demand.
India’s gems and jewellery export sector, accounting for approximately 27 percent of global jewellery consumption in 2019, plays a pivotal role in driving economic growth.
Despite the challenges posed by surging gold prices, the gems and jewellery sector remains resilient, contributing significantly to India’s merchandise exports. With the market size expected to expand to USD 103.06 billion by 2023, India aims to achieve gems and jewellery exports of USD 100 billion by 2027.