NEW DELHI: India’s exports of gems & jewellery — the third-largest foreign exchange earner for the country — grew marginally by 1.45% to $21.11 billion in FY09 despite a contraction in global demand. The growth, however, is due to a robust performance in the first half of the fiscal. In the second half of FY09, the global downturn caught up with the sector and exports dipped by 18.9%, mainly due to a fall in demand from the US.
According to the industry, the first six months of the new fiscal will continue to be low-key. However, exports could rise in the second half of 2009-10 if there is a turnaround in the global economy, the Gems & Jewellery Export Promotion Council (GJEPC) chairman Vasant Mehta said.
Addressing a press conference on Wednesday, Mr Mehta pointed out that the sector witnessed a job loss of about 2 lakh workers during the past year. “The job losses are not just because of downsizing. It is largely due to closing of hundreds of small units because of falling orders,” Mr Mehta said.
The growth in exports of gems & jewellery in 2008-09 was mainly due to a sharp increase of 23.64% in export of gold jewellery to $6.85 billion. Gold jewellery accounts for one-third of the country’s total gems & jewellery exports. Cut & polished diamonds, which account for a little less than two-third of total gem & jewellery exports, witnessed a dip of 8.24%, with exports decreasing to $13 billion.
On the future prospects of the sector, Mr Mehta said the situation was not expected to worsen. “We are looking at a period of bottoming out of the recession. Hopefully by last quarter of the fiscal, the situation would improve, though we have not yet set an export target for the year,” Mr Mehta said.
In 2008-09, UAE was the largest exporting destination with 31% of exports, followed by Hong Kong with a 25% share. The US was the number three destination with its share declining to 20% in FY09 from 25% in the previous fiscal. The sector is also looking at diversifying and tapping new markets. China, Russia and the CIS countries are the ones identified by GJEPC as prospective export destinations.
Source : The Economic Times