The gems and jewellery sector is not hopeful of witnessing a significant rebound in business during the current fiscal amid the COVID-19 outbreak and the geopolitical tension across the world, industry sources said on Tuesday.
The fierce clash between troops of India and China in eastern Ladakh that left 20 Indian Army personnel dead, and the extension of tariff exemption to Bangladeshi products by China may invite fresh troubles for jewellery exporters, they said.
“It would take a year to revive the sector,” Gem and Jewellery Export Promotion Council (GJEPC) chairman Colin Shah said.
Jewellers are keeping their finger crossed for the upcoming festive season in the wake of the coronavirus outbreak, Swarna Shilpa Bachao Committee secretary Bablu Dey said.
“They are not bullish about their businesses this fiscal and do not foresee a spurt in discretionary spending by customers in the current situation. Jewellers are hoping for an uptick in sales during the upcoming festivals,” he said.
Dey said the retail sales are down at present, and if it continues for the next few months, many small retailers will have no alternative but to down their shutters.
Speaking about the extension of tariff benefits by China to Bangladesh, Shah said they will have to examine the future impact of the move.
China has announced tariff exemption for 97 per cent of Bangladeshi products effective from July 1.
Shah said China and Hong Kong account for one-third of the gems and jewellery exports from India.
The total gems and jewellery exports during 2019-20 dipped by 8.91 per cent to Rs 2,51,096 crore.
According to him, overall gems and jewellery exports in April and May declined by 82.31 per cent over the corresponding months of the last year due to the lockdown imposed to contain the COVID-19 outbreak.
Exports of cut and polished diamonds (CPD) during April and May this year witnessed a 77.42 per cent fall over the same period of 2019, he said.
“China alone accounts for about 15 per cent of finished Indian diamond market, and so far there has been no impact due to the border tiff. If it worsens, the pain for the sector could increase,” Shah said.
The industry will recover fast with an improvement in credit availability and ease of doing business, he added.