Economy

Gem, jewellery exporters seek special package

Suresh P Iyengar Mumbai | Updated on March 27, 2020

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The Gem and Jewellery Export Promotion Council (GJPEC) has urged the RBI to announce a special package for easing the pain of export business hit by the Covid-19 pandemic.

While welcoming the RBI move to reduce the statutory bank ratios and infuse much-needed liquidity immediately into the system, Colin Shah, Vice-Chairman, GJEPC, said a reassessment of facilities availed by exporters, and that too in a consortium account, is a time-consuming process and will not provide immediate relief to the gem and jewellery industry.

The process should ensure that exporters get the benefit of lower rates within seven days of making an application; but if it takes 90 days, then the whole purpose is defeated, he said.

Gem and jewellery exporters have been hit badly both on the domestic and global front. The prolonged shutdown across the globe has put huge pressure on the jewellery businesses.

Ease loan conditions

Shah said the RBI should immediately cut the lending rates on export finance and reduce the margin required for availing loan by exporters from banks.

In a bid to bounce back once the lockdown is lifted, an interest subvention of 5 per cent should be given to both jewellery manufacturers and traders. The industry should be given a packing credit of 90-180 days depending on the business cycle, over and above the existing credit limit.

Packing credit is a pre-shipment finance given by banks to procure raw materials and arrange goods ready for export. In certain sectors, banks usually provide packing credit against the stock of raw materials or finished goods in certain cases.

Gem and jewellery exports have been falling consistently in last few months before coming to a standstill in early March.

Published on March 27, 2020

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