Exports of gems and jewelry are expected to drop sharply in March as well as in the first quarter of the next fiscal year due to the disruption caused by the coronavirus epidemic, according to a report.
An industry largely trade-oriented and attracting more than 5,000 exhibitors and 10,000 buyers at various shows experienced a steady decline in exports during the 11 months of FY20, February 2020 being a major disappointment, said CARE Ratings. in a report.
A 41% annual drop in cut and polished diamond exports resulted in a cumulative 19% year-over-year drop in exports for the entire gemstone and jewelry industry in February 2020, he added. .
The gemstone and jewelry industry continued to face barriers in the form of high tariffs on basic goods, continued decline in exports and restrictions on the availability of bank credit, and to add to this, the recent Covid-19 epidemic in major consumer markets, including the United States. , Europe, China, Hong Kong and other countries in Southeast Asia have further exacerbated the situation of players operating in this industry, according to the report.
“This has temporarily disrupted the operations of all members of the value chain. For this reason, exports of precious stones and jewelry from India should experience a sharp decline not only in March 2020, but also in the first quarter from exercise 21 “, he added.
National jewelry retailers could also suffer heavy losses, which were already plagued by loose demand due to rising gold prices in recent months and have now temporarily closed their stores due to the foreclosure imposed in the country. National retailers will experience revenue loss, profitability pressures and longer operating cycles, which could further weaken their borrowing capacity in the future, he added.
Akshaya Tritiya’s upcoming festivities may not offer many happy signs, as demand for jewelry is expected to remain subdued in the short term, the rating agency said.
The short-term outlook for the gemstones and jewelry industry is negative, while the long-term outlook remains positive, due to the growing awareness of branded jewelry, the increased power of purchase in the cities of levels II and III, of the increase in the female active population and the growing preference for diamond jewelry. added.