Gems and jewellery exports declined 20 per cent to USD 2.7 billion in October due to weak demand in western markets, according to the data provided by GJEP.
In October last year, these exports stood at USD 3.39 billion.
"The demand for gems and jewellery items is still sluggish in the US and European markets. This is hitting our exports," an official of the Gems and Jewellery Export Promotion Council (GJEP) said.
Major markets for the country's gems and jewellery include Europe, the US, the UAE and Hong Kong.
In the beginning of the fiscal, the council had estimated that gems and jewellery exports would touch USD 40 billion in 2012-13.
However, during April-October 2012, these exports dropped 13.1 per cent stood at USD 22.5 billion compared to USD 25.9 billion.
Gems and jewellery exports sector which employs 1.5 million people constitute 17 per cent of India's total exports.
During 2011-12, these exports were worth USD 43 billion.