The gems and jewellery industry in India witnessed contrasting trends in May 2026, with exports facing challenges due to record-high gold prices and supply disruptions, while domestic demand remained strong due to weddings, festivals and investment buying.
The overall gems and jewellery trade exports fell 2.49% to $2.05 billion in May, compared to a year-ago figure of $2.10 billion, according to the Gem and Jewellery Export Promotion Council (GJEPC). The largest drop was in exports of plain gold jewellery, down 14.75% to $758.44 million.
GJEPC said that exporters have been affected by high gold prices, limited gold availability and regulatory restrictions with banks' supply of gold to manufacturers.
"We have taken up this matter with the government and are hopeful of a positive resolution," GJEPC Chairman Kirit Bhansali said, as quoted by PTI.
During April-May 2026, the gold demand for export manufacturing declined to 11 tonnes from 14 tonnes a year ago, dropping over 21%. Meanwhile, average gold prices climbed around 46% year-on-year to $4,723.88 per troy ounce, making Indian jewellery less competitive in overseas markets.
However, studded gold jewellery exports rose by 1.79% to $463.57 million, while cut and polished diamonds exports advanced 3.31% to $980.73 million. Exports of lab-grown diamonds jumped nearly 26% to $101.50 million and silver jewellery exports gained 14.73% to $97.39 million.
Domestic jewellers maintained robust earnings in the first quarter of the year with gold prices up around 80%. Nuvama Research stated that demand was healthy, supported by wedding and festive purchases. Titan grew its revenue 45% while Tanishq's same-store sales rose 50% and Tanishq's customer additions by 8%.
Other jewellers also witnessed healthy growth; Kalyan Jewellers posted 68% revenue growth, P N Gadgil rose 126% and Bluestone had a growth of 48%, while Sky Gold jumped 80.6%.
"Driven by weddings and festivals, jewellery demand has maintained a steady momentum in Q4FY26 despite an 80%-plus surge in gold prices," the Nuvama report said.
Higher prices have changed consumer behaviour. In order to save on buying costs, many buyers are turning to 9-karat, 14-karat and 18-karat jewellery, and others are opting for gold bars and coins as an investment.
P N Gadgil said the bars and coins segment made up 40% of the quarterly sales, and Titan said that its coin sales tripled year-on-year.
A notable proportion of the revenue from Senco Gold's and Thangamayil Jewellery's quarters came from exchange sales, with the latter seeing exchange sales grow from the usual 25% to around 50-60%.
Also Read: Why India's Gold Loan Sector is Under Extreme Stress
Titan's jewellery margin fell to 10.5% from 11.9% and P N Gadgil's gross margin dropped to 9.7% due to increased promotional spending. Thangamayil Jewellery, on the other hand, improved its operating leverage to boost its operating margin to 7.84%.
The gold import duty has been recently raised from 6% to 15% in India, which has led to another challenge for the sector.
Every 1% increase in gold price has a 0.3-0.5% drop in the volume of demand, which means that with the latest hike in duty, jewellery volume could drop by 3-5% in the coming few quarters, Nuvama Research says.