India’s gems and jewellery exports may witness a sharp decline in March as well as in the first quarter of the next fiscal due to disruptions caused by the Coronavirus outbreak, according to a report.
An industry that is largely trade-oriented and attracts over 5,000 exhibitors and 1,00,000 buyers at various trade fairs have witnessed a continuous decline in exports in all of the 11 months of FY20, with February 2020 being a major disappointment, CARE Ratings said in a report.
A 41 per cent annual decline in cut and polished diamond exports led to a cumulative exports fall of 19 per cent year-on-year for the overall gems and jewellery industry in February 2020, it added.
The gems and jewellery industry continued to face hurdles in the form of high custom duty on key commodities, continuous fall in exports and restrictions on the availability of bank credit and to add to this, the recent outbreak of COVID-19 in top consuming markets including USA, Europe, China, Hong Kong and other south-east Asian nations has worsened the situation further for players operating in this industry, the report said.
There could be a heavy loss for domestic jewellery retailers as well, who were already distressed with lax demand due to escalated gold prices in the last few months and have now temporarily shut their stores due to the lockdown imposed in the country.
Domestic retailers will face the loss of revenue, stress on profitability and lengthening of operating cycles, which could further dampen their borrowing abilities in future, it added.