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02 April, 2020, 05:09 PM IST

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Gems, jewellery exports stare at steep fall in Q1 next fiscal: Report

An industry that is largely trade-oriented and attracts over over 5,000 exhibitors and 1,00,000 buyers at various trade fairs has witnessed a continuous decline in exports in all of the 11 months of FY20, with February 2020 being a major disappointment, CARE Ratings said in a report. The upcoming festivities of ‘Akshaya Tritiya' may not offer much cheerful signs, as jewellery demand is expected to remain muted in the short term, the rating agency said.

GJEPC donates Rs 50 crore for benefit of gem & jewellery workers

The Fund allocated by GJEPC will also be utilized to support the Government ...

  • Purchases are estimated to plummet 30% in 2020 from the 690 tons last year.

    "Following the COVID-19 outbreak, we face unprecedented levels of anxiety globally, which has affected all asset classes including gold. It appears that volatility in gold price is driven by massive liquidations across all assets and likely magnified by leveraged positions and rule-based trading," WGC Managing Director (India) Somasundaram P R told.

    Following the coronavirus outbreak, the gems and jewellery sector in the country has come to a standstill with retailers managing to do only 20-25 per cent business due to fewer footfalls amid fear of the virus' spread, according to an industry body.

    Total purchases are estimated to plummet 30% in 2020 from the 690 tons last year.

    It’s a flight-to-safety rally, she said, that’s “based on fear.”

    As a trial base, the bank delivered its first shipment to clients in Chennai and Coimbatore recently.

    The high level of selling is causing the futures to move into discount to spot, against a premium of Rs 100-150 in normal times.

    Speaking at an event, organised by ICC here, he said the exposure of SBI to the jewellery industry is around Rs 20,000 crore, adding that the lending growth to the sector has been muted at present.

    In the first nine months of this fiscal, India’s total diamond exports by value were down ~18%, on-year. About 40% of these exports are to Hong Kong, which has seen dysfunctional local markets over the past year or so. And since January 15 this year, diamond exports have practically halted.

    The new showrooms will go on stream in the next three months..The expansion is part of the jewellery retail chain’s plan to become the world’s largest gold retail chain. Currently the company own and operate more than 260 showrooms spread across 10 countries. The aim is to triple the total showroom count to 750 in the next five years.

    A 0.5% customs duty has also been introduced on rough coloured gemstones, rough semi-precious stones, rough synthetic gemstones polished and rough cubic zirconia. Introduction of the duty on gemstones will also affect exporters, as much of the imported gemstones are shipped to international markets after value addition.

    "We have been pursuing with the government constantly with few concerns which require immediate attention, like reduction in import duty on precious metals -- gold, silver, platinum to 4 per cent from 12.5 per cent. Reduce import duty on cut and polished diamonds and gemstones from 7.5 per cent to 2.5 per cent," GJEPC Chairman Pramod Kumar Agrawal said.

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