India’s gems and jewellery exports decline by 11% in Feb
The Dollar Business Bureau
Due to lack of institutional finance support in the aftermath of Punjab National Bank (PNB)-Nirav Modi scam, along with value-added taxes introduced on gold purchases by Dubai, India’s gems and jewellery exports witnessed a decline of 11.13% in the month of February over a year ago.
The country exported Rs.23,613.26 crore worth of gems and jewellery in February 2018, as compared to Rs.26569.49 crore in the same month last year, according to a data by the Gems and Jewellery Export Promotion Council (GJEPC).
Following the PNB scam of Rs.13,600 crore by billionaire Nirav Modi and his uncle Mehul Choksi, both public and private sector banks have considerably reduced lending to the gems and jewellery sector. The worst hit by this are small and medium enterprises (SMEs) as many of these are unable to infuse capital to purchase raw material.
Dubai, which is one of the largest jewellery markets for Indian ornaments, has introduced 5% value-added tax on gold from January 1 this year. The Gulf city is the destination for nearly 50% of India’s gems and jewellery exports.
During February, the major drop is recorded in silver jewellery and gold medallions and coins, with exports declined by 84.67% and 81.56%, respectively, over a year ago. Exports of rough diamond also fell by 26.42%.
However, the exports of gold jewellery recorded a growth of 88.79% in February this year as compared to a year ago, as per the data.
During the period April-February 2017-18, the export of gems and jewellery stood at Rs.242167.7 crore, witnessing a decline of 7.53% over the previous year.
On the other hand, imports of gems and jewellery increased by 7.41% during the April-February period of the current fiscal. The gems and jewellery imports were stood at Rs.182022 crore in April-February 2017-18 as compared to Rs.169458 crore in the similar period a year ago.