The country's gems and jewelry exports contracted by 8 percent to about USD 32.72 billion during the fiscal year 2017-2018 owing to demand slowdown in major markets, including the US, reported PTI.
According to the Gems and Jewellery Export Promotion Council (GJEPC) data, exports stood at USD 35.47 billion in the year 2016-2017.
The labor-intensive sector contributes about 14 percent to the country's overall export.
The reason behind decline in shipments due to negative growth in the export of silver jewelry; gold medallions and coins along with a sharp rise in the return of consignments.
The industry has asked for support in terms of increasing incentives under the Merchandise Exports from India Scheme (MEIS) to boost the shipments.
Exporters have also raised concerns over stoppage of working capital due to Goods and Services Tax (GST), which is impacting exports.
As per the data, silver jewelry shipments in the year 2017-2018 dipped by 15.8 percent to USD 3.39 billion.
Similarly, the export of gold medallions and coins declined by about 63.56 percent during the last financial year.
However, total gold jewelry shipments went up about 11 percent to USD 9.67 billion during the period.
Shipments of rough diamonds too reported a negative growth of about 5 percent. But exports of cut and polished diamonds grew by 4.17 percent to USD 23.74 billion in fiscal 2017-2018.
India's main export destinations are the US, Europe, Japan, and China. America accounts for about one-fourth of the country's total gems and jewelry exports.
During the last fiscal, assignments worth USD 8.26 billion were returned as against USD 7.7 billion in 2016-2017.
China is the biggest competitor of India in the sector.
On the other hand, imports of gems and jewelry recorded a growth of 9.7 percent in the year 2017-2018 to USD 31.52 billion.
Imports of the rough diamonds gained expansion to the tune of 10.6 percent and gold bars by 34.28 percent, during the last fiscal.