Positive Global Consumer Markets Will Help Indian G&J Industry Create 3 Mln Jobs

The Gems & Jewellery Export Promotion Council (GJEPC) organised a banking summit in Mumbai – ‘Diamond & Jewellery Financing 2018 – Mitigating Risks Effectively’ to discuss credit-related matters. The summit was held in the presence of Suresh Prabhu, Commerce & Industry Minister, Commerce Secretary Rita Teaotia, Manoj Dwivedi, Jt Secretary, Ministry of Commerce, Pramod Agarwal, GJEPC Chairman and dignitaries from gems and jewellery as well as banking industry.

“The Indian gems and jewellery industry has already proven its capabilities as it is one of the largest employer in the country as it employs 5 million across the country. Gold, jewellery and diamonds put together, this industry has been creating huge employment opportunity for the country. Looking at global consumer markets going up, this industry can create millions of additional jobs. The industry needs support of the banks to grow further. The banks need to understand that this is a different industry and accordingly they need to come out with a foolproof strategy so that the sector is not denied of credit. Banks need to take risks that are identifiable,” said Suresh Prabhu. The Gems & Jewellery sector contributes to about 14 per cent to the country's overall export.

Adding a word of caution, Commerce Minister further said, “The government is keen on the growth of this sector but the sector too should not take bank lending for granted. Anything that’s unethical or illegal won’t be supported by the Government. Banks and the industry need to work in tandem with each other.”

 The industry has been urging bankers not to reduce their current credit limits as this would obstruct and erode exports and employment creation. The country's Gems & Jewellery exports contracted by 8 per cent to about US$32.72 billion in 2017-18.

During the summit, the GJEPC presented a white paper on ‘Diamond & Jewellery Financing 2018’. The white paper was presented by Sanju Kothari, Convener, Banking, Insurance & Taxation Committee. The white paper talked about Assessment of credit limits, Need for Associate Party Transactions, Concerns in stock valuation, how everyone can come together to mitigate risk, and the Councils’ recommendation to banks and members.

The council informed the banks and the commerce ministry about various steps to be taken to avoid loopholes. It also informed that banks and the gems and jewellery industry both have a role to play in mitigating the risks.

Also, the GJEPC signed an MoU for the MyKYC Bank Project, which will help in increasing transparency in the industry and will be a help to the banks as it will address compliance risk and identification of ‘Genuine’ companies while lending.