The recently concluded India-European Union Free Trade Agreement has ignited fresh optimism within India's gems and jewellery sector, particularly as exports to the United States face significant challenges. Announced in New Delhi, this landmark pact promises to reshape trade dynamics with the 27-member European Union, a bloc renowned for its affluent consumer base with a strong appetite for luxury items.
A Transformative Deal for Precious Exports
According to the Gem and Jewellery Export Promotion Council (GJEPC), the FTA's provision for zero-duty market access could potentially double bilateral gems and jewellery trade to an impressive $10 billion within the next three years. This development arrives at a critical moment for an industry that currently contributes approximately $30 billion to India's total export portfolio.
Current Trade Landscape and Future Projections
Presently, India's gems and jewellery trade with the European Union stands at $5.2 billion for 2024, comprising $2.7 billion in exports and $2.5 billion in imports. The agreement specifically eliminates customs duties of 2–4% on precious jewellery, a tariff barrier that has historically hampered India's competitive edge in European markets.
Currently, EU jewellery imports from India total only $628 million, with $573 million attributed to precious jewellery and $55 million to imitation jewellery. This relatively modest figure has been largely constrained by these duties and intense competition from nations enjoying preferential trade arrangements.
Industry Leadership Hails the Agreement
GJEPC chairman Kirit Bhansali expressed profound gratitude to Prime Minister Narendra Modi and Union Commerce and Industry Minister Piyush Goyal for securing what he described as a "transformative moment" for the sector. Bhansali emphasized that the India-EU FTA will dramatically accelerate market diversification efforts for the gems and jewellery industry.
Strategic Expansion and Economic Impact
"Zero-duty access to the world's largest consumer market will empower major export hubs across Gujarat, Rajasthan, Maharashtra, and West Bengal to significantly scale up shipments of precious, silver, and imitation jewellery," Bhansali stated. He highlighted how this agreement will enable these regions to better leverage India's globally recognized design capabilities and craftsmanship.
The timing of this agreement proves particularly strategic, arriving as exports to the United States have witnessed a concerning 44% decline. Bhansali noted that amid soaring metal prices and shifting global trade dynamics, the FTA will deliver multiple benefits including improved profit margins, enhanced international competitiveness, accelerated manufacturing growth, and substantial employment generation.
Opening New Horizons for Indian Brands
Beyond immediate economic metrics, the agreement creates unprecedented opportunities for Indian jewellery brands to establish and expand their presence across European markets. This market access represents more than just tariff reduction—it signifies a gateway to one of the world's most sophisticated luxury consumer bases, where Indian designs and craftsmanship can gain greater recognition and market share.
The India-EU Free Trade Agreement thus emerges as a pivotal development that could redefine the global positioning of India's gems and jewellery industry, offering a much-needed counterbalance to trade challenges in other markets while unlocking substantial growth potential in Europe.
