Gems and jewellery exporters have urged the government to grant them permission to start factories in the Santacruz Electronic Export Processing Zone (SEEPZ) and to set up the Bharat Diamond Bourse (BDB) in Mumbai, the backbone of India’s $40 billion jewellery exports.
The Union Ministry of Home Affairs (MHA), in its revised guidelines for implementation of lockdown 3.0 for three weeks starting on May 4, had allowed private companies to start operations with 33 per cent manpower (barring containment zones). This was subject to the condition that they maintained social distancing and frequently sanitised the factory premises, equipment and workers.
Jewellery manufacturers are awaiting relaxation in lockdown norms in Maharashtra, especially in Mumbai, to commence operations in SEEPZ and BDB and start shipments to meet export obligations. GJEPC estimates that around 30 per cent of India's annual exports are still waiting to be executed.
“We have been receiving online orders during the Covid-19 lockdown. Orders are getting carried over from the pre-lockdown period as well. But many of them are being cancelled as buyers have started moving to alternate markets like China. Hence, we need to start our factories in SEEPZ immediately to meet export obligations else, orders will be lost forever,” said Colin Shah, Vice Chairman, Gems and Jewellery Export Promotion Council (GJEPC).
“We are ready. We have drawn up a five-week plan since commencement of business at the bourse and have gradually achieve full scale in a phased manner,” said Anoop Mehta, President, Bharat Diamond Bourse (BDB), the largest diamond bourse in the world.
Meanwhile, rating agency Crisil estimates revenue of India’s diamond polishing industry to plunge in fiscal 2021 to a decadal low of $13-15 billion, compared with the $24 billion in fiscal 2019, and an estimated around $19 billion in fiscal 2020.
Jewellery exports to the United States and Europe which together account for over 45 per cent of India’s polished diamond shipment, fell a staggering 41 per cent on-year in February as the pandemic intensified, and have plunged further since then, especially with the nationwide lockdown starting mid-March.
Exports to other markets suffered, too. In Hong Kong and China, which account for about 45 per cent of the exports, demand for luxury goods such as diamonds, jewellery and watches is estimated to have nosedived by 79 per cent in February and even further since then.