The Gem & Jewellery Export Promotion Council (GJEPC) has appealed to the Government of India and the Reserve Bank of India to revise credit terms for exporters and importers in the gems and jewellery trade which has been badly affected by the Hong Kong protests last year and the subsequent recent novel coronavirus outbreak.

Stating that “the gems and jewellery trade has huge exposure in terms of business with Hong Kong and mainland China” and “almost 35-40% of the business from India is with these respective territories”, GJEPC Chairman Pramod Kumar Agrawal has asked the authorities to “consider giving leeway and time for credit facilities availed.”.

In a letter to officials of the RBI, Ministry of Finance and Ministry of Commerce, the Council has noted that Indian entities are exporting cut and polished diamonds, diamond studded jewellery and artificial jewellery in a big way and are also participating in the various Hong Kong trade fairs, as the region is also a very huge transitional port for global distribution of various products worldwide.

It pointed out that the protests in Hong Kong commenced around April 2019 and have ever since been going on and have turned violent since Sept-Oct 2019. This has disrupted the business in various ways, with offices being partially closed due to violent protests; clearance of parcels exported being affected and overall slowdown of trade.

GJEPC said that this has impacted the turnover and financial dealings with the traders based out of Hong Kong with India, the financial implications of which have led to delay in shipments and delay in receipt of export proceeds.

Further, the Council states, “As if this was not enough, the breakout of coronavirus in mainland Chnia and then further spreading to other countries has also led to the impact on the gems and jewellery trade in these regions.”

It points out that with the epidemic spreading globally and with virtual isolation of trade with China, the business has been facing severe hurdles with commitments not being fulfilled in exports and for inward remittances. Moreover, a major trade fair scheduled for March has been rescheduled.

“The trade foresees major imbalance in payments for the community dealing with various merchants in this part of the world,” said Agrawal.

Bearing this in mind, the GJEPC has requested the authorities to consider:

“1. Giving leeway and time for credit facilities availed by exporters / importers for meeting their financial commitments. Extension of tenor should be permitted.

2. The LC, Packing Credit and bills outstanding for shipments to China or Hong Kong and for goods already exported for which payments are receivable from buyers in these regions, should be given at least six months of additional time to resolve the financial delinquencies.

3. Impact on classification of accounts under SMA category such as SMA 0, SMA 1 or SMA 2 for such exports should be suspended and additional time may be given in order to make good the same so that hardship and defaults can be avoided, and the situation can be overcome smoothly.”

Appealing to the authorities to consider the current crisis as a “force majeure situation”, Agrawal said that speedy steps to resolve the matter would be beneficial to the trade fraternity.