NITI Aayog Releases ‘Trade Watch Quarterly’ Q3 FY26: Roadmap for Gems & Jewellery Sector

Shri Suman Bery, Vice-Chairman of NITI Aayog, today released the latest edition of the "Trade Watch Quarterly" for the third quarter of FY 2025–26 (October–December 2025), offering a comprehensive analysis of India's trade performance amid evolving global economic dynamics. The report was unveiled in the presence of Dr. Arvind Virmani, Member, NITI Aayog, along with senior officials.

At a time when global trade continues to navigate macroeconomic uncertainties and geopolitical disruptions, the report underscores India's resilient performance while identifying key areas for strategic policy intervention.

Resilient Yet Mixed Trade Performance in Q3 FY26

India's external trade landscape in Q3 FY26 presented a mixed but stable picture:

• Merchandise exports recorded modest growth of 1.6%

• Merchandise imports rose more sharply by 7.9%, reflecting strong domestic demand

• Services exports posted robust growth of 7.8%, continuing to outperform goods trade

• A sustained services trade surplus helped anchor India's overall external balance

The report highlights that services—particularly IT, financial services, and business process outsourcing—remain a critical stabilizing force for India's trade account.

Spotlight on Gems and Jewellery: A Strategic Export Sector

The thematic focus of this quarter's edition is India's gems and jewellery sector, a cornerstone of the country's labour-intensive manufacturing ecosystem and a major contributor to exports.

Globally, the sector (excluding raw gold) is valued at approximately $378 billion in 2024, with India accounting for $29.5 billion in exports, representing a 7.8% share of world exports.

India's strengths lie primarily in:

• Diamonds and precious metal jewellery, which together account for over $207.3 billion in global demand

• Exports worth $26.7 billion in these segments

• A dominant position in diamond processing, with Surat emerging as the world's largest cutting and polishing hub

This positions India as a critical node in global value chains, driven by its expertise in value addition to imported raw materials.

Structural Challenges and Concentration Risks

Despite its strong global presence, the report flags several structural challenges that could limit future growth:

• High market concentration, with exports largely dependent on key destinations such as the United States, UAE, and Hong Kong

• Dependence on imported raw materials, making the sector vulnerable to global supply disruptions

• Fragmented MSME base, resulting in limited value addition and scale inefficiencies

• Credit constraints, particularly due to limited trust from financial institutions

• Skill and design gaps, affecting competitiveness in premium and niche segments

• Limited integration into global trading hubs, restricting access to broader markets

Emerging Opportunities: Lab-Grown Diamonds and Value Addition

The report identifies lab-grown diamonds as a promising emerging segment, offering opportunities for India to expand its footprint in high-growth, technology-driven markets. Additionally, shifting global consumer preferences towards sustainability and customization present new avenues for innovation.

To capitalize on these trends, the report recommends:

• Increasing value addition and product diversification

• Expanding into new and emerging markets

• Enhancing access to finance and raw materials

• Investing in advanced technologies, design capabilities, and workforce skills

• Developing a more integrated and globally competitive ecosystem

Policy Direction for Sustained Competitiveness

Addressing the gathering, Shri Suman Bery emphasized the importance of adapting to structural shifts in global trade. He noted that India's long-term growth will depend on its ability to diversify exports while strengthening domestic capabilities in key sectors.

"In sectors such as gems and jewellery, aligning with evolving global demand, strengthening value addition, and addressing structural constraints is essential for maintaining competitiveness," he stated.

Dr. Arvind Virmani highlighted the need for deeper integration into global value chains, alongside targeted sectoral strategies, to sustain export momentum and generate quality employment.

A Data-Driven Resource for Policymakers and Industry

The Trade Watch Quarterly serves as a critical analytical tool for policymakers, industry stakeholders, researchers, and academia. By combining data-driven insights with forward-looking recommendations, the publication aims to support informed decision-making and strengthen India's trade competitiveness in a rapidly changing global environment.

The full report can be accessed here:

Strengthening India's Trade Future

As global trade undergoes transformation driven by technological shifts, supply chain realignments, and evolving consumer demand, India's ability to respond with agility and strategic foresight will be crucial. The latest NITI Aayog report provides a clear roadmap for navigating these changes, particularly in high-potential sectors like gems and jewellery.