Indian gem and jewellery industry could soon expect bailout

The Indian gem and jewellery industry may soon receive some answers to salvage the downturn it is facing today. The Indian government seems to have realized that it cannot wait and watch for the tide to turn for this sector, which is one of the largest foreign exchange earners for the country. It must act.

It is reported that the Gems and Jewellery Export Promotion Council (GJEPC), is hopeful that the Union Government may announce a package in the very near future.

Concern at the state of affairs at the sector is natural considering the lack of demand in the US market, which has spiraled off into the closure of gem and jewellery units in India and consequently huge numbers of the labour lay-offs. India has been facing poor sales both in international and domestic markets, causing export earning to drop and a cluttered pipeline. Its exports of polished diamonds dropped by 21 percent in December 2008, also its domestic and international jewellery sales have shown a drop of around 20 percent in the holiday season last year.

The sector has asked the government to allow status holders to import gold directly and sell to exporters, which will help overcome the crisis of inequitable gold supply being witnessed currently, It will also support the smaller exporters to get gold at their desired quantities. It also asked for better support from the Reserve Bank of India, in dollar credit.