‘Gold Continues To Hold Fort’: Lok Sabha Elections and Impact On Gems & Jewellery Sector

The Indian gems & jewellery Sector is experiencing a fascinating interplay of trends, with the recent Lok Sabha election results in 2024 adding another layer to the mix.

The sector is undergoing several interesting trends. Gold prices have been on a significant upward trend, reaching all-time highs. Factors like a weakening dollar and rising global demand contribute to this surge.

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Experts believe with the results of the Lok Sabha election 2024 declared and the Modi government remaining in power, the sector hopes for continuity in governance as a key takeaway from the elections and looks forward to a further seamless ease of doing business.

On the positive side, a stable government might instil investor confidence and lead to increased spending on discretionary items like jewellery. Additionally, if the new government prioritises infrastructure development, it could indirectly benefit the gems and jewellery sector by boosting overall economic activity.

Demand Unaffected By Results

Colin Shah, MD, Kama Jewelry, said, “While the consumer demand largely remains unaffected due to election results, the industry hopes on continuity on governance as a key takeaway from the elections and looks forward to a further seamless ease of doing business. Despite the hurdles, the Indian gems & jewellery sector has flourished in the last one decade and looks forward to policy reforms that promote a favourable environment for the sector.”

“From the investors’ perspective, gold has once again proven to be a robust hedge against economic weather fluctuations. As the stock market witnesses a blood bath owing to election results, yellow metal continues to hold fort as it’s barely impacted by domestic factors,” Shah added.

Moreover, gems and jewellery exports, a major segment of India’s export basket, plummeted to a three-year low in FY24 due to decreased global demand. Reportedly, the decline in demand resulted from economic downturns in China and the US, key markets for India.

Despite the export dip, the long-term forecast for the industry remains positive. The market is expected to grow at a healthy rate, driven by factors like rising disposable income and a growing domestic market.