The demand for jewellery in India is expected to contract in the second and third quarters of fiscal year 2023 due to a combination of factors including the recent hike in import duty on gold, high volatility in prices and lower consumer sentiments, according to a recent report by rating agency ICRA.

‘While demand is likely to contract by ~8% YoY in Q2 FY2023, the contraction is expected to be higher at ~15% in Q3 FY2022 due to the extraordinarily high base of Q3 FY2022, following the post-pandemic reopening of the economy and the substantially high demand in the wedding and festive seasons in FY2022,” the report said.

However, ICRA said for the full fiscal year 2023, the industry is expected to grow by ~10% year-on-year (YoY), thanks to a strong performance in quarter one of the current fiscal year and the hope of a steady demand in the wedding and festive season in the fourth quarter of the current fiscal. In fact, within the jewellery retail industry, the revenue of organised retailers is likely to grow at a higher pace of ~14% YoY in FY2023 due to continued store expansions and increasing share of organised retailers. Demand in FY2023 is also pegged to be ~30% higher than the pre-COVID level seen in FY2020.

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