The Gems and Jewellery Export Promotion Council held a very well attended press conference at the Intercontinental Hotel at Mumbai on December 16,’08 to voice the industry’s fears about a recession which is deepening every day in the industry and to plead for government’s assistance for interim relief and to help avoid 25%-30% layoffs in the jewellery trade. The meeting was chaired by Vasant Mehta, chairman, GJEPC and was presided over by Sanjay Kothari, convenor, promotion, marketing, business development committee, Anoop Zaveri, member, IIJS sub-committee, Bakul Mehta, convenor, diamond panel committee and Sabyasachi Ray, executive director of GJEPC.

At the press conference Mehta was candid about the bleak prospects before the jewellery trade. “The Indian jewellery industry is passing through a difficult time due to the financial collapse of America. Due to the steep decline in business, we decided to call a press conference and explain the state of the industry. We don’t see any light from anywhere around the world. There has been only 3% growth from April ’08-Nov.’08,” he said without mincing any words. The US is the world’s largest jewellery market which before the recession consumed 50% of the world’s jewellery.

The Indian jewellery industry is India’s leading foreign exchange earner which employs over 5 million people and whose economic benefits reach out to over 25 million people. The trade also accounts for 13.45% of the country’s total exports. The economic slowdown forced the industry to lay off 65,000 workers between August and October ’08 and cut back production by over 25% with exports dipping by 34.25%. “We realized one and half years ago that the American market was saturated,” declared Mehta. “We are now not asking for a bail-out from the government, but just for help in this crisis.”

The GJEPC has appealed to the government that status holders should be allowed to import directly and sell gold to exporters, increase of rupee subvention from 2% to 4% ,availability of adequate dollar credit lines by RBI and releasing of dollars from the government’s dollar reserves as credits to stave off the present crisis in the industry. The Council has placed these proposals before the ministry of commerce and hopes for immediate remedial measures.

Mehta mentioned that the industry has also faced banking problems “as foreign exchange in terms of dollars have not been easily available to do business for the last one and a half years. This and the erratic supply of gold have been major constraints.” Mehta explained that the gold artisans of smaller cities have often not had enough gold and this has led to delays in orders, with the Middle East, in particular, complaining about erratic supply. The Council has also asked for the import restriction on worked coral to be removed, a proposal which the environment ministry has not addressed for a long time. Kothari pointed out that “because of such problems we are not able to compete with the coloured stone industry of Thailand.”

GJEPC has initiated several measures to help a deeply troubled industry. Kothari disclosed that a delegation has been sent to Russia and the CIS states to explore business opportunities, a delegation will be sent to the Middle East in the first or second week of January ’09 and DTC, the US and Israel will be promoting diamonds strongly. Further, a’Made in India’ brand will be launched in the Middle East and the domestic market will be promoted energetically. Mehta also revealed that the Council has asked the government for permission to sell 25% of the export goods in the domestic market and are waiting for the notification to this effect to be issued.

Mehta concluded that the Council believes that the industry can bounce back from this unprecedented crisis in the next six months.