Gem and jewellery exports hit by financial woes; growth expected to be flat
The gem and jewellery sector, hit by cash flow and facing hurdles in financing, is expecting that the growth in exports will be flat in dollar term by end of the current fiscal, an official said on Tuesday.
"We are facing some challenges in financing. We are sorting out with the government and banks. Risk profile of our sector has increased and advanced to the sector is based on the profile. Banks are putting certain regulations and asking more collateral," Gem and Jewellery Export Promotion Council (GJEPC) Executive Director Sabyasachi Ray said here.
"Collateral is around 20-25 per cent of total limit and we are ready to move it up to another 10-15 per cent depending on the scenario," he said.
Banks' exposure in the sector is around Rs 60,000 crore and cash flow still remained an issue, the council's Chairman, Pramod Kumar Agarwal, told the media after the inauguration of the first ever India Jewellery Buyer Seller meet.
"Maybe in rupee term, we may clock growth. But in dollar term, exports are expected to be flat," Ray said. "Early indications are positive in terms of sales in the US and the industry is looking for Christmas sales in the US."
Devaluation of the rupee has also hit exporters in terms of the credit limit.
"Credit limit is in rupee term. With the devaluation, every limit has gone down proportionately. This is a challenge that we are facing," Ray said.
Agarwal also said the council also wanted the government to reduce the duty on diamonds.
(With inputs from agencies.)