Gems and jewellery exports dip 4% to $3.59 bn in Feb

Declining for the fourth month in a row, gems and jewellery exports in February fell by 4.15% to $3.59 billion due to sluggish demand in key markets such as the US and Europe.

The exports were at $3.74 billion in February 2013.

According to exporters, the overseas shipments are also contracting due to the curbs imposed by the government on gold imports. The imports declined 71.4%, year-on-year, to $1.63 billion in February.

The gems and jewellery sector accounts for over 15% of the country's total exports.

For the 11-month period of the 2013-14 fiscal, the shipments have declined by 7.15%, year-on-year, to $35.73 billion, an official in the commerce ministry said.

After registering a growth of 21.8% in October, gems and jewellery exports started contracting. In January, the exports were down by 24.4%.

In order to curb the current account deficit (CAD), the government has taken several steps to contain gold imports. It has raised import duty to 10% on the metal and also made it mandatory for traders to export 20% of the imported gold, thereby creating supply crunch in the domestic market.

The local supply shortage has hit exports as well with volumes declining on a monthly basis.

Gems and jewellery exports sector employs 1.5 million people.

The Commerce Ministry has asked the Finance Ministry to relax curbs on gold imports.