)
India’s gem and jewellery exports are likely to rise seven per cent this financial year, with rising demand from developed countries and West Asia.
“After achieving the figure of $44 billion a few years ago, exports declined to $41 bn in 2013-14. We are hopeful that overall exports this year will hit $44 bn once again,” said Vipul Shah, chairman, Gems & Jewellery Export Promotion Council (GJEPC).
The industry is expecting favourable policy support from the government, with this segment being one of the largest foreign currency earners. In addition to scrapping the 80:20 rule for import of gold (a fifth of any gold imported for processing must be re-exported), the industry expects the government to extend the credit cycle period to at least 180 days.
The audit committees of major credit supplying banks have ordered tostrictly adhere to 90 days of credit cycle for recovery of dues from diamond processors. The Reserve Bank of India (RBI) has set the cycle (a period that ends with remittance from importers since the time of availing a loan from banks) to 90 days, with lenders leisurely following the direction.
“The cycle of 180 days is too short for a jewellery exporter to get remittance from overseas buyers. The industry seeks 240 days. Even 180 days is feasible. The shortened period has blocked massive funds with banks, that reduce credit equivalent to duties unless proof of foreign remittances are shown,” said Pankaj Parekh, vice-chairman of GJEPC.
The shortened credit cycle has also reduced import of rough diamonds into India, complains the industry, and processing units might go on strike if the credit cycle is not restored to at least 180 days soon, said Parekh.
