Sops announced by the government should be implemented to arrest a possible decline in gems and jewellery exports including those of cut and polished diamonds.
"It also needs to be ensured that exporters do not lose their edge in markets of US, Belgium, Israel, Hong Kong, UAE, Singapore, Thailand and Switzerland," it said.
Of the 12 diamonds set in jewellery worldwide, 11 come from India.
Exports of jewellery from India, the world's largest producer, grew 24% for April-August period of the current fiscal to $7.75 billion. India's export of gems and jewellery rose 3% to $17 billion in 2006-07 from $16.6 billion a year ago.
While the rupee rise is hurting exports, the domestic market for gems and jewellery is witnessing healthy growth.
Changing lifestyles and rising income levels even in tier II and III cities will lead to a surge in demand for jewellery, which is expected to reach $20 billion by 2010 and $30 billion in 2015. The sector also holds the potential to generate additional employment for three lakh people annually, Assocham said.
