The banking sector’s lending to the gem and jewellery industry has declined by 10 per cent and is expected to have an adverse impact on exports, said the Gem & Jewellery Export Promotion Council, set up by the Ministry of Commerce and Industry.
Gem and jewellery exports from India declined by 9 per cent between April and June to $10.1 billion against the $11.1 billion logged in the same period last year. The council expects exports to fall by 10 per cent this fiscal. Pramod Agrawal, Chairman, GJEPC, said the industry is witnessing a crisis of sorts as banks have curtailed lending to traders and have been demanding collateral security and extensive documentation.
“We hope the government will intervene and bring some relief to the ailing industry that contributes 7 per cent to the GDP. It is time to bring back the interest subvention scheme to help in ease of doing business,” he said.
“Bank finance is the lifeline of the industry and any decrease would pull down gem and jewellery exports as well. Banks are insisting that all customer invoices should be through the bank, which is seriously hampering cash flow on a daily basis. Banks have also taken away all benefits on assessment fees due to which the cost of finance has gone up,” said Colin Shah, Vice-Chairman, GJEPC.