Neogem India Ltd Management Discussions

Introduction

The Indian gems and jewellery industry is a major contributor to the countrys GDP, exports, and employment, making it a focus area for export promotion. It is the worlds largest diamond cutting and polishing center and is known for its skilled labor and low costs. The industry is experiencing growth due to rising global demand and government support, which includes policy reforms, investment in technology and skill development, and initiatives to boost exports and promote lab- grown diamonds.

Market Size

Indias gems and jewellery sector continues to be a major contributor to the economy, accounting for around 7% of GDP and providing employment to more than 5 million people. In FY2025- 26, Indias gross gems and jewellery exports reached approximately 2.45 lakh crore (US$27.71 billion), on a provisional basis. India maintains its rank as the 8th largest exporter of gems and jewellery globally, accounting for around 3.2% of global exports. The sector is a major component of Indias merchandise exports, with a reported share of around 15.7% . The Government continues to promote the sector through investment facilitation, technology upgradation, skill development and export- promotion measures, while 100% FDI remains permitted under the automatic route.

The India- UK Comprehensive Economic and Trade Agreement (CETA), which entered into force on 15 July 2026, provides preferential tariff access for Indian exports, including gems and jewellery. Indias gems and jewellery exports to the UK are currently valued at around US$1.03 billion, while the UK imports approximately US$4 billion worth of jewellery annually. The Government expects CETA to potentially double Indias gems and jewellery exports to the UK within 2- 3 years, creating significant opportunities for Indian manufacturers, exporters and artisans.

Developments

Government initiatives and policies

Export promotion: Government initiatives support exporters through trade finance, market access, international trade promotion and branding, with a long- term target of US$100 billion in gems & jewellery exports by 2040. Fiscal policy: Customs duties have been rationalised, including a 5% duty on cut and polished diamonds and gemstones. ECLGS 5.0 (2026) provides enhanced credit support to eligible MSMEs. Infrastructure development: There is an increased focus on creating common production/processing centers, design centers, and testing facilities, with government assistance for up to 90% of the cost.

Industry growth and market trends

Lab- grown diamonds: The sector is witnessing a significant boom in the market for lab- grown diamonds, driven by their affordability and ethical appeal, The Demand continues to grow due to their lower price, sustainability and ethical appeal, although natural diamonds remain dominant. Export performance: India remains a major global gems & jewellery exporter, with FY2025- 26 exports of about US$27.7 billion. Surat continues to be a leading global hub for diamond cutting and polishing. Domestic demand: Domestic consumption is growing, fueled by rising disposable incomes, urbanization, and lifestyle changes. There is a growing demand for both traditional and modern designs. E- commerce: Online jewellery sales are expanding, supported by digital payments, wider product choice, convenience and growing consumer trust.

?‚? Consumer preferences

?‚? Personalization: There is a growing demand for personalized and custom-designed jewelry that tells a personal story, moving away from mass-produced pieces.

?‚? Modern aesthetics: Younger consumers are driving demand for contemporary and minimalist styles, while trends include the resurgence of bold, chunky chains and reinvented pearl designs.

Key Issues Faced by the Players

Financial and economic challenges

?‚? Financial and economic challenges

?‚? Financing and credit access: Many small and medium-sized enterprises (SMEs) struggle to secure bank credit due to high interest rates, collateral requirements, and a lack of trust after past financial scandals.

?‚? Import dependency: The sector remains highly dependent on imported gold, diamonds and other raw materials, making it vulnerable to global supply conditions, exchange-rate movements and import-duty policies.

?‚? Price volatility: Fluctuations in gold and silver prices significantly impact consumer demand, purchasing patterns, and the working capital needed by businesses.

?‚? Competition: India faces increasing competition from China and other manufacturing hubs, particularly on cost, technology and scale, making productivity, design and value addition increasingly important for maintaining Indias export position.

Structural and operational challenges

?‚? Unorganized sector: A large part of the industry is fragmented and family-owned, which limits access to resources and scale.

?‚? Regulatory burdens: Compliance with rules like GST and mandatory hallmarking adds complexity, cost, and delays, particularly for smaller players.

?‚? Technological gaps: Many units lack modern technology and design capabilities, leading to lower productivity and an inability to compete in premium markets.

?‚? Counterfeits and transparency: The prevalence of low-quality and counterfeit products erodes consumer trust, while the lack of robust certification and traceability for both natural and lab-grown diamonds is a growing issue.

Market and consumer challenges:

?‚? Changing trends: The industry must adapt to evolving global fashion trends, but innovation in designs and materials is lagging.

?‚? Imitation jewellery: The growing market for affordable and fashionable imitation jewellery poses a direct threat to the traditional market.

?‚? Consumer awareness: Consumers are increasingly demanding more information about product provenance, certification, and the distinction between natural and lab-grown stones.

Outlook

Indias gems and jewellery sector has a positive long- term outlook. The domestic market was valued at about US$85 billion in January 2026 and is projected to reach US$130 billion by 2030. FY2025- 26 exports stood at approximately US$27.7 billion, while the Government has set an export target of US$75 billion by 2030. Key growth drivers include rising consumer spending, organised and branded jewellery, gold demand, lab- grown diamonds, digital/retail, and expanding FTA- based market access. However, high gold prices and global economic uncertainty remain potential headwinds.

Operations

During the year under review, the Company has had no production activities. There is no sale in the current year. Due to stoppage of production, the expenditure has reduced leading to reduction in loss. The Company has suffered a loss of Rs. 20.86 lakhs as compared to loss suffered in the previous year of Rs. 31.56 lakhs.

Also the Companys accounts with its banks are in non- performing assets since 2015 leading to stoppage of Companys operations. The Management of the Company has been putting in its best efforts to revive its business operations and mitigate the losses and is hopeful for better results in the coming years.

Internal Controls & their adequacy

The Company has in place adequate system of internal control. It has documented procedures covering all financial and operating functions.

Human Resources & Industrial Relations

The Companys Human Resources philosophy is to establish and build a strong performance and competency driven culture with greater sense of accountability and responsibility.

The industrial relations scenario remained unchanged throughout the year.

27. Report on Corporate Governance:

As per the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015, the provisions of Corporate Governance are not applicable to your Company. Thus, the Company is not required to annex a Report on Corporate Governance.

28. Corporate Social Responsibility (CSR):

In line with the provisions of the Companies Act, 2013 and the rules framed there under with respect to the Corporate Social Responsibility (CSR), the provisions of Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable to the Company. Accordingly, the Company is not required to formulate a policy on CSR and was not required to constitute a CSR Committee.

	For and on behalf of the Board of Directors
	Gaurav Doshi
	Chairman & Managing Director
	DIN \u2010 00166703
	32, Gems & Jewellery Complex III,
	Seepz (SEZ), Andheri (E), Mumbai \u2010 400 096
	CIN: L36911MH1991PLC063357
Date: 12 th August, 2026
Place: Mumbai
Registered Office:
32, Gems & Jewellery Complex III,
Seepz (SEZ), Andheri (E), Mumbai \u2010 400 096
CIN: L36911MH1991PLC063357
	For and on behalf of the Board of Directors
	Gaurav Doshi
	Chairman & Managing Director
	DIN \u2010 00166703
Date: 12 th August, 2026
Place: Mumbai	32, Gems & Jewellery Complex III,
	Seepz (SEZ), Andheri (E), Mumbai \u2010 400096
Registered Office:
32, Gems & Jewellery Complex III,
Seepz (SEZ), Andheri (E), Mumbai \u2010 400096
CIN: L36911MH1991PLC063357