Hit by slowing demand and high cost of finance, the gem and jewellery industry may miss this fiscal’s export target of $43 billion. Last year, it had recorded exports of $40 billion.
In the first six months of this fiscal, exports were down 17 per cent at $15.60 billion ($18.71 billion).
Speaking at the sidelines of a press conference here on Tuesday, Praveen Shankar Pandya, Chairman of the Gem and Jewellery Export Promotion Council (GJEPC), said the industry is going through tough times with no signs of revival in demand except in the US. If the trend continues it may just manage to meet last year’s export numbers, he added.
“We expect cut-and-polished diamond exports to be down 10-13 per cent this fiscal,” he said. In the first six months of this fiscal, diamond exports were down 13 per cent at $10 billion ($12 billion). Against the perception that the gems and jewellery industry is full of wealthy people, numerous small and medium cut-and-polish units are being shut down and a lot of people are losing their jobs, said Pandya.
In a clear sign of crisis in the industry, the import of rough diamonds has fallen 26 per cent to $6.95 billion ($9.39 billion).
Rough diamonds are cut and polished in India and exported worldwide.
Lower demand Adding to the woes, cut-and-polished diamond prices have fallen 10-15 per cent while those of rough diamonds have been holding steady, pointed out Pandya. The inventory pile-up due to lower demand has led to many SMEs shutting shop, he added.
Against the earlier one-two months, it takes five-six months now to sell processed diamonds, he further said.
This leads to smaller companies closing their units.