India's gem and jewelry export market grows 22 percent, but difficult year ahead

In comparison, total imports of gem and jewelry provisionally rose to $18.5 billion in 2007-08, growing 32.5 percent from last year.

India's gem and jewelry exporters rely a lot on clients of the US, China, Russia, Commonwealth of Independent States (CIS), and the UAE for a major portion of their revenue.

While the US and Hong Kong account for 26 percent of total gem and jewelry exports, the UAE account for 21 percent.

"The export destinations indicate how far the Indian industry has gone in its attempts to diversify its markets and reduce its heavy dependency on the US market alone," Kothari said.

Indian exporters are also looking at African nations like Namibia and Angola for expanding their business activities like direct sourcing of rough diamonds, setting up factories and training institutes.

However, things are not going to be easy, Kothari said. "We are going to have a difficult year, even if efforts are made to other markets, it's not going to be that easy. For other countries to catch up, it is going to take a huge effort," he said.