The Gem & Jewellery Export Promotion Council (GJEPC) has signed an MoU with the Shenzhen Rough Diamond Exchange and will also open an office in China to promote trade between the world's largest bullion markets, the apex trade body has said.
"We have signed an MoU with the Shenzhen Rough Diamond Exchange (SRDE) to promote our trade and open an office to tap fast-growing Chinese diamond market. We want to broad-base our market and China is expected to provide us opportunity as an alternative market," GJEPC chairman Pramod Kumar Agarwal told PTI.
The jewellery manufacturers from Shenzhen as well as other parts of China are also exploring long-term business relationships with their counterparts here.
The bilateral trade in the gems and jewellery sector has been on the rise in the recent years. In 2017, the trade had reached USD 21.41 billion, registering a growth of 29 per cent year-on-year, with exports from here clocking USD 13.96 billion.
Shenzhen is the largest jewellery manufacturing hub in China housing nearly 5,000 units that employ around 1,50,000 people, including nearly 15,000 individual traders and professionals.
The Chinese market has shown growth over the last year, Agarwal said, adding that there is a great potential for further increase in diamond jewellery consumption as there is a rise in the number of Chinese getting married.
The GJEPC is also looking at setting up bases in smaller markets like Bangladesh, Nepal and Vietnam, which will help the sector to incrementally grow, Agarwal said, adding that the council is also talking to Kuwait to create some avenues there.
Agarwal pointed out that gems and jewellery exports slipped by 9.13 per cent to Rs 53,294 crore in the June quarter. This, he said is in spite of the improvement in the US market as this was offset by the downward trend in the Middle East, which has share of 35-40 per cent of our exports.
The industry is also facing liquidity issues and GJEPC is having talks with the government and is hopeful that the government may step in and find a solution to improve bank lending to the sector, Agarwal said.
Bank lending in the sector has come to a standstill following the Nirav Modi scam involving PNB, which lost around Rs 13,500 crore through this. It also led the Reserve Bank to ban letters of understanding, the instrument that was used by Modi to dupe bank and his foreign trade partners.
"We may see flat growth in exports at USD 41 billion this year compared to USD 40 billion achieved in FY 18," he added.
Disclaimer: No Business Standard Journalist was involved in creation of this content
