Mumbai, Dec 31 (IANS) India's gems and jewellery industry is optimistic over the year ahead after navigating market dynamics in 2024 to become stronger by the year-end, the All India Gem and Jewellery Domestic Council (GJC) said in a statement on Tuesday.

GJC Chairman Saiyan Mehra said: "India’s gems and jewellery market is expected to grow to $100 billion by 2025, driven by a combination of domestic demand, export potential, and strategic initiatives."

The sector is likely to emerge as one of the key drivers of India’s economic growth in 2025, contributing significantly to the country’s GDP and creating millions of new jobs, he added.

The country continues to be one of the largest global hubs for the production, export, and consumption of jewellery. The sector is expected to achieve a compound annual growth rate (CAGR) of 5-6 per cent during this period, underpinned by strong consumer demand, both locally and globally, Mehra said.

He further stated that India's gems & jewellery industry is well-positioned for growth, with promising domestic demand, strong export potential, and ongoing transformation through digitalization and sustainability efforts.

"Though we expect prices of the precious metals to rise further in 2025, it should not affect the overall demand for gold and silver, and we are hopeful that it will be better than 2024, as India's middle class and young population (which forms a significant portion of the consumer base) will continue to drive demand for gold and diamond jewellery. The wedding jewellery market will also remain a major growth driver in India," the GJC chief said.

GJC Vice Chairman Rajesh Rokde said that 2024 was an "excellent year" for the jewellery industry, with customers showing a strong preference for affordable and sustainable options.

"We saw a significant increase in demand for silver jewellery, particularly among the younger generation," he remarked.

In terms of market trends, gold prices remained volatile, but customer demand remained strong. Silver prices saw a significant increase, driven by industrial demand and investor interest. The diamond market faced some challenges, but there was a growing interest in lab-grown diamonds and sustainable diamond options, he said.

"As we look ahead to 2025, I expect customer demand to remain strong, driven by increasing awareness about sustainability and responsible sourcing practices. I predict a 12-15 per cent growth in gold sales and a 15-18 per cent growth in silver sales. By the year 2025, India is expected to witness over 4 million weddings, which will have a positive impact on the jewellery industry and increase jewellery consumption in the country," Rokde said.

He pointed out that gold in India is viewed not only as a fashion accessory but also as an investment, and this dual role has attracted greater interest from the younger generation towards the precious metal.

Meanwhile, gems and jewellery exports saw a decline of 12.94 per cent to $1,986.21 million (Rs 16,763.13 crore) in November due to prolonged geopolitical tension, according to figures compiled by the Gem and Jewellery Export Promotion Council (GJEPC).

Gems and jewellery exports in November 2023 stood at $2,281.4 million, the GJEPC data added.

There was a decline in the export of cut and polished diamonds export as well as lab-grown diamonds during the month.

However, the plain gold jewellery exports grew 72.12 per cent to $652.81 in November as compared to $379.27 million in the same period of the previous year.

Prolonged geopolitical tension continued to remain a matter of concern for the Indian gems and jewellery industry, which has led to a slowdown in exports after seeing an uptick in the previous month, according to a GJEPC statement.

"Therefore, any critical development on the geopolitical front may continue to disrupt the trade activities in the times ahead. However, with the holiday season around the corner, we expect the demand to stay upbeat driven by heightened buying sentiment," GJEPC's former Chairman Colin Shah said.