Patience & Resilience will Help Members of this Industry Emerge out of this Situation Stronger
The gems and jewellery industry is a definite causality in this pandemic. A sector which has been a major contributor towards India’s GDP is now in complete lockdown, much like other sectors. Members of the Gems and Jewellery Export Promotion Council are brainstorming and coming up with solutions on a daily basis to help this industry come out this situation stronger. Multiple webinars, constant discussions with the Ministry of Commerce and relief packages for karigars among other things have been facilitated by members of the council. Colin Shah, Vice Chairman, GJEPC & Sabyasachi Ray, Executive Director, GJEPC talk about government aid, recovery & more.
Excerpts from Interview with Colin Shah
What are the immediate concerns to be addressed in this current situation?
The need of the hour is to come out of this lockdown – how to bring our manufacturing zones in Mumbai, Jaipur and other areas back to normalcy in the next 2-3 months. Once we have done that, we need to make an industry protocol for Covid-19 situation on what we should be doing in our factories keeping in mind the health and safety of our employees. After all this is taken care of, the focus will move towards demand creation in this new world. We will have to figure out how to create more virtual B2B meetings. People are not going to be able to travel for shows, so we will have to experiment. In the last 2 weeks, we have already done a lot of webinars. It is a new format even for us, we are all learning everyday and getting better.
The exports has taken a bad hit? What does the industry expect from the government?
In the end, we will need a special package for the gems and jewellery industry. We will need some kind of rebate on the salaries to be paid for the next six months till businesses recover. The rupee is devalued and gold price has gone up, so we’ll need a conversion of some percentage of everyone’s working capital into long term loans. These are two macro level support we expect from the government in terms of employment and business.
What is your advice to people in the industry and when do you believe we will fully recover?
The whole industry is affected by this pandemic. The larger you are, the more overheads you have. Demand erosion is an eventuality. We have to stay motivated and firm, ride through these tough times and whoever endures this period will come out strong. There will be a space for everyone once this is over.
As for recovery, there is so much about this on the Internet already. To be honest, our industry will take anywhere between 12-18 months to recover from this crisis.
Excerpts from Interview with Sabyasachi Ray
What are the different initiatives by GJEPC to help state of daily wage earners in the industry – the migrant workers?
There is a three-pronged approach that we have adopted to help the industry. We have created a system to verify that the beneficiary is really a karigar. We are asking would-be beneficiaries to upload past six months passbook details, aadhar card, etc in order to ascertain that he really is a poor karigar, in need of monetary support.
Right now, we have earmarked Rs 21 crore for welfare schemes of various sorts. We have appealed to other associations, and all stakeholders to pool in their monetary resources in order to create a wider monetary base to implement these welfare schemes.
We have asked all our members to help their own employees as well, wherever required. We have also appealed to members abroad to donate generously for these welfare schemes. In this way we are trying to help all daily wage earners, who are really facing acute poverty to tide over this situation. Some big members have come forward to pledge certain generous sums for these schemes.
Since you are in touch with government officials -- what is the government’s stand on the aforementioned matter?
We have told the government that this is a huge effort. Around 50 lakh people are associated with us in several ways. So we have appealed to the government to have a structured benefit plan. Appropriate data mapping is required, this has begun – the government is working along these lines all the same, when they will announce their schemes, we cannot tell. But I am sure that efforts in this direction are being made.
Will the government provide any loan waivers – or deferment for G & J industry borrowers?
Our members have both domestic and export businesses. There are two types of credit given to exporters – pre-shipment credit and post-shipment credit. Banks have extended terms for their credit – we have requested the government to give 180 days credit extension for both. In this regard, currently 90 days grace period is provided.
They have also announced working capital loans for all business owners. In addition to 10 percent COVID loan – additional ad-hoc credit can also be availed by business owners. We have demanded the percentage to be increased to 20 per cent long term loan – with lowest interest rates. This is our demand, it hasn’t been met as yet – but we are hopeful that it will soon be allowed by RBI.
Interest equalization scheme which was valid for exporters till March 31, 2020 should be extended for another one year – this demand has been made. The MSME business owners were given five per cent subvention; this limit should be increased to seven per cent. In addition, five percent subvention should be given across the board for all members of gems and jewellery.
We have requested for roll over of export credit – to 180 days. Gold metal loans have been requested – people have taken gold on loan for export – wherever people have taken their repayment should be extended to 180 days. The same should be allowed for domestic gold trade as well.
In case of gold metal loans market-to-margin should not be there, and gold metal loan roll over should be allowed where a minimum of one kilogram gold is taken on loan. RBI has allowed a moratorium – we are requesting that interest should not be charged for this period as well.
IIJS is slated to happen in August this year – what are the plans regarding this premium show, given the present circumstances? Now that the HK show is also falling on the same timeline?
Government will screen the possibility of conducting this show. Right now, we cannot say anything in this regard. Industry is facing difficult times, if IIJS has to happen we will see how to conduct it this time. The Hong Kong show has been postponed, so we are concerned about it. We all understand that government may ask us to take certain extra precautions, which we will. As to how the Hong Kong show will affect our show is indeed difficult to predict.
What is your advice to the industry?
This year has been exceptionally bad for all businesses across the world. We are no exception. When such unprecedented situations arise we should be prepared to meet them. We cannot help it, we may have to display a lot of patience and perseverance and tide over these challenging times with courage.