Banks increase credit to gem and jewellery industry by 15%
Over the past year, as many gem and jewellery businesses have continued operations despite the challenges of the pandemic, banks have increased credit to the gem and jewellery industry by 15%, showing increased confidence.
Banks in India have increased credit designated for the gem and jewellery industry from Rs 546 billion ($7.35 billion) in July 2020 to Rs 627 billion in March 2021, the Gem and Jewellery Export Promotion Council reported on its website. The GJEPC expects the sector to emerge from the second wave of the pandemic on a strong growth trajectory.
“With a meagre export turnover of $2.51 billion in the month of September 2020, the sector managed to achieve a turnover that grew by about 36% to $3.42 billion in March 2021 - being higher than the average monthly export turnover in the last three years,” said GJEPC chairman Colin Shah.
“We have witnessed robust demand from the international markets. With the pandemic said to be contained in China, and with the US inoculating about 40% of its population, demand from these two countries accounted for 75% of India’s polished diamond export in Q3 and Q4 of FY 2021. In fact, the U.S. retail jewellery sales tripled on month-on-month basis in May 2021 and grew by about 45% in comparison to May 2019 as a result of the pent up demand and stimulus funds.”
The GJEPC praised the global gem and jewellery for its response to the pandemic, including the decision taken by Indian diamond trade organisations to call for a voluntary halt to importing rough diamonds to prevent over-supply during lockdown. The increased credit assigned to the sector will aid its recovery and facilitate continued growth.
“All global miners suspended sales in the first half of 2020, cut their production plan by 25% to 30% for 2020 and allowed clients to defer their purchases as nations were going into a lockdown leading to closure of retail stores & cancellation of all major trade shows,” said Shah.
“The government has been very proactive in supporting this labour-intensive industry. Various government schemes including extension of the interest equalisation scheme, positive changes in definition of MSME, emergency credit guarantee schemes, restructuring and other relaxations given to export and manufacturing sector have supported the recovery of business post September 2020.”
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