FDI in Indian Diamond Industry

One of the fastest growing sectors in the country, the Gems and Jewellery sector plays a significant role in the Indian economy, contributing around 7 percent of the country’s GDP and 15.71 percent to India’s total merchandise exports. India is deemed to be the hub of the global jewellery market because of its talented craftsmen, its superior practices in cutting and polishing fine diamonds and precious stones and its cost-efficiencies.

  • The Government of India has permitted 100% Foreign Direct Investment (FDI) in the Indian diamond industry under the automatic route.

Based on its potential for growth and value addition, the Government of India has declared the Gems and Jewellery sector as a focus area for export promotion. The government aims to promote ‘Brand India’ in the international market and has undertaken various measures to promote FDI in the jewellery sector and to upgrade technology and skills.


Industry Scenario

Gems & jewellery industry in India has grown at a CAGR of over 14.8% over the last 50 years and is expected to provide employment opportunities to more than 8.2 mn persons by 2022.

India is the world’s leader in cutting and polishing Diamonds due to its price competitiveness and willingness to work at lower margins. 14 out of every 15 diamonds are polished in India. India’s diamond industry has been contributing 60% of world’s supply in terms of value, 85% in terms of volume and 92% in terms of pieces. India is also the 3rd largest consumer of polished diamonds and consumes 8% of the global polished Diamonds.

Gold jewellery forms around 80% of the Indian jewellery market, with the balance comprising fabricated studded jewellery that includes diamond studded as well as gemstone studded jewellery.


  • 1
    Largest diamond processing center in the world with 95% of world’s processed diamonds
  • 2
    Second largest foreign exchange earner in India; contributing ~15% to total export earnings
  • 3
    Presence of 250,000 small and large shops, 28,000 processing units, 6,000 offices and workforce of ~ 4.5 mn people



1. January 2018 - De Beers Group invests USD 5 mn in Surat diamond grading unit. The facility, employing about 100 people, has the capacity to process diamonds worth over USD 500 mn every year.

2. February 2017 - London’s ultra-luxury jeweller for the super-rich, Faberge, owned by the world’s top emeralds and rubies-miner Gemfields Plc., has decided to enter India.

3. October 2017 - South India-based Kalyan Jewellers has lined up investment of about USD 21.2 mn to expand its footprint in the Uttar Pradesh market.

4. August 2017 - Jewellery major, Joyalukkas has decided to invest USD 94.4 mn in the current fiscal to expand its retail footprint in India, where it is expecting to increase its turnover by 18.9% in the current financial year to USD 1.3 bn.

FDI Facts

1.1bn The cumulative FDI (USD) in diamond and gold ornaments between April 2000 and December 2017

100% FDI is permitted under the automatic route in this sector

20.5% CAGR for cumulative FDI in diamond and gold ornaments in India FY 2008-17