Economic slowdown and a declining demand for jems and jewellery in countries like the US, Europe and Japan will hit the industry's exports, the review of the economy for the year 2008-09 said.
"Specific export intensive manufacturing sectors could be strongly affected", it said.
The report said that a major concern for exports is the slowdown in OECD countries which is turning into recession with growth estimates of the US, EU and Japan being revised downwards virtually every month since September 2008.
"This will have a negative effect on imports of these countries and consequently on exports of emerging economies," it said. In fact, Christmas orders from the US and Europe have gone down by 15 to 25 per cent according to countries industry leaders. The manufacturing segment saw exports of cut and polished diamonds dip by 20.18 per cent as against the the same period last year.
The country's gems and jewellery exports stood at 20.88 billion dollars for 2007-08, a growth of 22.27 per cent over 17.08 billion dollars the previous year. Following the global financial meltdown, the country's exports for the first time after a period of seven years dipped by over 12 per cent in October. Also, India's total exports declined by about 10 per cent in November.
