Gemstones have been a part of our culture since time immemorial, and are still increasing in popularity in the market due to their astrological and ornamental values. However, these beautiful gemstones represent something more than astrological tools or beautiful jewellery additions – they are an important area for investment!

But why should one invest in gemstones, especially if they are not professionally involved in that industry? This is because of the durable and rare nature of these stones, which ensure that they remain good investments even in long term. Since gemstones are difficult to obtain and relatively scarce, their value does not depreciate over time, and therefore, they are a safe bet when investing large amounts of money.

Gemstone Market Boom

In recent times, the market of coloured and bright gemstones have boomed into prosperity, which makes it an exciting place to invest in. Let us look into some figures.

The global gemstone market size was about 22 billion USD in the year 2018, and the same is expected to grow at a compound annual growth rate of 4.8% in the period between 2021 and 2026. The gem and jewellery sector is expected to have a global market size of more than 100 billion USD by the year 2025.

While North America and Europe have traditionally been the biggest players in the gemstone market, countries from the Asia Pacific, especially China and India, are emerging as key markets for gemstones as well. With growing consumer awareness, increasing marketing of gemstones, and an increase in disposable incomes, India and China are taking large market shares in terms of import and export in the industry.

India, especially, has seen tremendous growth in its gemstone market in recent times. India’s gemstone and jewellery exports are expected to reach a staggering amount of 100 billion USD by the year 2025! India is also a huge exporter in this industry, with the US importing 44% of Indian gems and jewellery in September 2020 (amounting to around 930 million USD), followed by Hong Kong (about 33%) and the UAE (about 13%).

The booming gems and jewellery sector in India contribute to about 7% of the country’s GDP. Due to the economic impacts of the coronavirus, and subsequent falls in the export figures, the government has proposed steps like reducing the import duties on cut and polished diamonds to increase imports once again.

Looking at these figures, it is easy to understand why investing in a sector as booming as the gemstone industry is a wise choice.

Things to Keep in Mind While Investing in Gemstones

No matter how booming any industry is, there is no substitute for wise investment choices. The same is true for investing in gemstones. Before splashing the cash in buying these stones, it is important to keep certain things in mind so as not to incur any financial losses.

Choose the Proper Source for Buying

This is one of the most vital aspects of investing in gemstones. Since gemstones are available from various areas in different forms and shapes, it is important to buy them from the correct sources so as not to overspend.

It is advisable to buy the gemstones from wholesale markets; if possible, the primary ‘Tier 1’ wholesale dealers will provide the best prices on gemstones. These dealers mine and cut the gemstones themselves, and therefore will offer prices that are much lower than the market prices. If primary deals are not available, the secondary dealers (those who buy the gemstones from these primary dealers and resell them) also offer rates well below the market rate.

Buy Properly and Wisely

However, just getting the source right is not enough. One needs to be careful while deciding how many and what kind of gemstones to buy.

Since it is advised that the purchase be made from wholesale dealers, buying multiple stones as opposed to single stones will further bring down the price. If you have the capital that is required, buy lots of stones at once so as to get the best deals out of them.

If you are confident about the buyer, you can also buy rough gemstones instead of cut ones, as they may represent a better value for money.

Choosing the Right Seller

This is as important as choosing the right buyer. You need to find buyers who will sell your gemstones at retail rates so that they can provide you with the largest margins of profit on the gemstones.

Finding gemstone buyers who will readily pay retail prices for the gemstones is not an easy task. Therefore, it would be wise to look for established sellers such as jewellery stores and auction houses as your potential sellers.

Add Value to the Gems

This is not always possible for everyone, but if you have to means to add value to the gems that you have purchased, it is advisable that you do so. Value addition may include converting rough gems to cut and polished gems, setting gemstones into jewellery, or even recutting gemstones into desirable shapes. These small changes can greatly increase the price of your gemstones in the market.