The Hindu Business Line : Jewellery exports down 34% in November

Mumbai, Dec. 16 Hit by the recession in the United States, gem and jewellery exports dipped 34.25 per cent to $987 million in November against $1,501 million recorded in the same period last year, according to Gem & Jewellery Export Promotion Council (GJEPC) data.

However, between April and November, exports were up marginally by 3 per cent to $13,909 million against $13,502 million logged in the same period last year.

At the manufacturing level, cut and polish diamond exports dropped 46 per cent to $510 million from $944 million recorded in November last year.

Bleak December

Forecasting no revival in exports in December either, Mr Vasant Mehta, Chairman of GJEPC, said on an average there was a reduction in orders of over 20 per cent in value terms between April and October.

The industry has been forced to lay off 65,000 workers between August and October, he added.

The industry employed over 1.3 million people.

The 20-day Diwali holiday, which are given to the workers, has been extended to an unprecedented 40 days, with no certainty on revival of business prospect, he said.

The industry was also hit by the shortage in gold supply. GJEPC has appealed the Government to allow status holders to import directly and sell gold to exporters. The move will also enable smaller exporters to fulfil their requirements of gold in smaller lots.

Pushed to the corner by the drastic drop in demand from the US, which accounts for 55 per cent of exports, GJEPC has urged the Government to increase the recently announced measure of rupee interest subvention from two per cent to four per cent and extend the same to dollar credit as well.

On the high interest rate on dollar finance, Mr Mehta said banks charge between four per cent and five per cent over LIBOR, even though RBI has indicated that only one per cent above LIBOR can be charged. The excess is taken on account of cost elements such as handling charges and commission, which are added to pad up the interest rate.

“The industry ends up paying almost 10 to 14 per cent interest. We are willing to shell out LIBOR plus two-and-a-half per cent, which should include all charges,” he added.

The current recessionary trend is likely to result in building up of stocks in the industry.

To overcome the difficult times in the international markets, the Government should allow units in export processing zone to tap the domestic markets as the industry is even willing to forego the concession given for exports, he added.

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