According to the data released by apex body for the gem and jewellery trade in India, set up by the Ministry of Commerce and Industry, the exports of gem and jewellery from India declined by 8.84 per cent during April-June 2018 to $10.1 billion compared to $11.1 billion in the same period last year.
"There has been at least 10 per cent decline in bank finance to the gem and jewellery sector which is going to adversely impact exports out of the country. This also implies that gem and jewellery exports for the 2018-19 will see a drastic drop of 10 per cent as well," it said in a statement.
Post the recent incidents, banks and other financial institutions have become stringent and are insisting on a much higher collateral security against bank finance, the council said.
"The council is taking all efforts to self-regulate and instil confidence amongst key stakeholders through a slew of reforms. However, the industry is witnessing a crisis of sorts as the banks have curtailed lending to the traders and demanding collateral security and extensive documentation," said council's Chairman Pramod Agrawal.
In such a scenario, the $41 billion export industry will see a gradual decline in the current fiscal, he said.
"We are hoping that 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 Interest subvention scheme to help in ease of doing business," Agrawal said.
The council's Vice Chairman Colin Shah said after all the efforts to make sure genuine players continue to get the finance, banks are "insisting for discounting that all customer invoices should be through the bank which is seriously hampering relationships with customers as well as cash flow on a daily basis".
"Banks have also taken away all benefits on assessment fees due to which cost of finance has gone up," he added.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
