Last year, gems and jewellery worth 9,236.46 million US Dollars were exported to the US – the highest among other countries. The exports to the UK stood at 941 million USD (File Photo)

The Free Trade Agreement (FTA) between India and the United Kingdom, signed on Thursday, has come as a shot in the arm for Surat’s gems and jewellery industry, which has been reeling under a slump triggered by the Russia-Ukraine conflict since 2022.

Though the scale of export to the UK in the sector is not as high as it is in the case of the United States, industry stakeholders in Surat said the FTA has brought some cheer to those involved in gems and jewellery trade in the city. Some industry leaders said the FTA has prompted them to explore trade options with the UK.

Last year, gems and jewellery worth 9,236.46 million US Dollars were exported to the US – the highest among other countries. The exports to the UK stood at 941 million USD.

“Now with the duty concessions, this figure is poised to surge to USD 2.5 billion in the next three years, elevating overall bilateral trade in the gems and jewellery sector to an estimated USD 7 billion,” according to a statement from Kirit Bhansali, Chairman of Gems & Jewellery Export Promotion Council (GJEPC).

Following the conflict with Ukraine, sanctions were imposed on Alrosa, the Russia-based diamond mining giant, which directly impacted livelihoods in Surat – a major centre for polishing diamonds in the world.

Talking to The Indian Express from the UK, Bhansali said, “Three years ago, India did an FTA with the UAE, and we have seen immense growth in the business between both countries with an annual growth rate of 12% to 14%. In the last three years, the total growth rate has been around 30%. Similarly, we are hoping that FTA with the UK will also boost the gems and jewellery sector in the coming years.”

Sources said that in terms of exports from India to the UK, the highest value is of studded gold jewellery, closely followed by polished natural diamonds, and then lab grown diamond (LGDs). The UK ranks fifth in the value of exports in this sector while the US brings in the maximum business.

Vallabhbhai Lakhani of Kiran Gems, a natural diamonds manufacturer and promoter, said, “India’s gems and jewellery business with the UK is not huge so the scale of impact of the FTA is difficult to guess. But something is better than nothing. The US is a major consumer of gems and jewellery. As of now, we have no presence in the UK but will explore an opportunity in the coming days.”

Nagjibhai Sakariya, promoter of HVK diamonds, too, said the company is hoping to explore business opportunities in the UK following the FTA. “We are doing business of diamond-studded jewellery worldwide, but due to lower demand from the UK, we haven’t touched that market so far,” he said. “A major consumer is the US market, and we have come to know that India and the US will be coming up with a trade agreement next month. A decision on such an agreement will impact the gems and jewellery industry,” he added.

According to figures from GJEPC , the gross exports of gems and jewellery stood at USD 28.67 billion in the financial year 2024-2025. This marks an 11.2% decline from USD 32.29 billion recorded in 2023 -2024.

Industry players blamed this dip in exports to the introduction of a 26% tariff on India under the US Fair and Reciprocal Tariff Plan. The other reasons that they cited were weak global demand and uncertainty in major markets, particularly the US, China and Europe. Many suppliers also held excess inventory from previous quarters due to slower offtakes, which limited the placement of new orders. The retailers worldwide adopted a wait-and-watch approach due to price volatility and geopolitical uncertainty, they said.

Talking to The Indian Express, Vipul Shah, Managing Director of Asian Star Company, a natural diamonds dealer, said, “The FTA between India and the UK will be a win-win situation for both countries. We began doing business with the Middle East three years ago, following the establishment of the FTA. We have received a good response, as we have gained new customers and our business has prospered. Now with FTA with the UK, we are also planning to move into the UK market and look for business opportunities. We will send a team to the UK next week to seek new customers.”

Smit Patel, director of Green Lab Diamonds, which makes lab-grown diamonds, said, “We have been doing business of loose lab-grown diamonds with the UK for the last few years. Now that the FTA has come into existence, we will also expand into the jewellery business, which we are currently operating with the Middle East, the US, Hong Kong, and other countries. Earlier, due to the impact of import duty in the UK, we would send fewer quantities of diamonds. Now, we will take full advantage of the zero duty and reach out to customers in the UK.”

Courtesy: Indian Express