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India’s domestic jewellery market will grow at a compound annual growth rate (CAGR) of 16 percent between FY24 and FY28, reaching a market size of USD 145 billion by FY28, according to a report by Minerva Capital Research. The report observed a significant transformation in the Indian jewellery sector, with the market witnessing a steady shift from unorganized to organized players. “India’s domestic jewellery market expected to register a 16 percent CAGR from FY24E to FY28E,” the report stated. Consumer preference for transparency, quality, and branded jewellery continues to drive this transition across the country.
Organized Sector Expands Its Share
The report noted that while the unorganized sector currently holds 62 percent of the market share, this is expected to decline to 57 percent by FY28. During the same period, the organized sector is projected to increase its market share to 43 percent. Organized jewellers are gaining ground as consumers increasingly opt for branded and certified products, especially in urban and semi-urban areas.
Southern India Leads in Demand
Region-wise, southern states dominate India’s gold jewellery market, contributing about 40 percent of total demand in FY23. The western region follows, accounting for 25 percent of the market. Wedding-related jewellery demand across India averages around 225-250 grams per household. The report noted regional variations in preferences: consumers in southern India favour traditional plain gold jewellery, while those in northern and western India show a preference for lightweight and diamond-studded jewellery, especially in 14k and 18k varieties.
Profit Margins and Product Categories
The report stated that fine jewellery accounted for nearly 90 percent of the total jewellery market in FY23, valued at approximately USD 63 billion. Gross margins for plain gold jewellery range between 10 percent to 14 percent, while diamond-studded jewellery yields higher margins of 30 percent to 35 percent.
Policy Push And Rural Penetration
Government initiatives, including reductions in customs duties—on gold and silver from 15 percent to 6 percent, and on platinum from 15.4 percent to 6.4 percent—as announced in the Union Budget 2024, are supporting the organized sector. Mandatory gold hallmarking from April 1, 2023, and PAN card requirements for purchases over Rs 2 lakhs have improved transparency. The organized sector continues to expand in rural areas, which account for 58 percent of total jewellery demand.
Sustainable Demand Patterns
Demand remains seasonal, peaking during wedding seasons (May-June and September-January), harvest periods (September-November and January-March). Also on festivals like Diwali, Dhanteras, Akshaya Tritiya, and Ugadi. The industry benefits from the absence of inventory obsolescence, as jewellers can recycle old pieces into new designs, ensuring sustainability in operations.
(With Inputs From ANI)
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