GJEPC Hosts Interactive Session, Strengthens Ties with Bankers Who Express Optimism for Industry Growth
The Gem and Jewellery Export Promotion Council (GJEPC) organised an interactive session with leading bankers in Mumbai on 17th October to discuss the current industry outlook and explore avenues for enhanced collaboration with financial institutions.
The well-attended session with over 75 participants began with an opening address by Mr. Vipul Shah, who set the tone for the event by highlighting the importance of strong banking partnerships for the growth of the gem and jewellery sector.
Mr. Vipul Shah said that continued support from banking partners will be even more critical during these challenging times. He added that this meeting is focused on strengthening the industry’s collaboration with banking partners, addressing mutual concerns, and tackling the financial challenges that are hindering our sector’s growth. He noted that together both sides can explore solutions that will benefit both the industry and financial institutions, ensuring a stable and prosperous future for all.
In his keynote address, Mr. Vipul Shah offered a granular perspective of the industry’s current situation. He spoke about the challenges the industry is facing, particularly the decline in demand in key markets like the USA and China, as well as the geopolitical concerns affecting trade. Despite these obstacles, he highlighted the resilience of the Indian gem and jewellery industry and the growth opportunities in the Middle East, supported by the India-UAE CEPA agreement. He also touched on the government’s recent policy measures, GJEPC’s role in advocating for the industry’s needs, and the importance of continuing strong partnerships with the banking sector to navigate financial challenges and drive future growth.
GJEPC has urged the Government to reconsider the Rs. 50 lakh cap on the Interest Equalization Scheme for MSMEs, as it falls short of addressing the financial needs of the gem and jewellery sector, which operates with high-value, low-margin exports and extended working capital cycles. To support the industry effectively, GJEPC has requested an extension of the scheme’s benefits for two more years, until March 2026, to help businesses plan more predictably during these challenging times.
Industry analyst Mr. Pranay Narvekar, Partner, Pharos Beam Consulting LLP, provided a comprehensive overview of the diamond industry outlook, highlighting potential opportunities and challenges and the role of banking in supporting its growth. Mr. Narvekar said that despite recent challenges, the gem and jewellery industry is expected to stabilise. Factors like retail diamond demand recovery, lab-grown diamond impact, and supply chain efficiency will shape its future. While the industry has faced fluctuations, its financial health has improved. Understanding these key factors is essential for businesses and bankers operating in this sector, he explained.
In his address, Mr. Niraj Shah, Country Head of Corporate and Institutional Banking, IndusInd Bank, shared a banker’s perspective on the gem and jewellery sector. He stated that the future of the gem and jewellery industry is bright, but it requires a collaborative approach and a focus on innovation, sustainability, and ethical practices. By working together, the industry can navigate current challenges and build a more resilient, competitive, and sustainable future.
A panel discussion featuring industry representatives and bankers followed, providing a platform for open dialogue and exchange of ideas. Mr. Russell Mehta, Managing Director, Rosy Blue (India) Pvt. Ltd., Mr. Ashish Mehta, Partner, Kantilal Chhotalal, Mr. Niraj Shah from IndusInd Bank, Mr. Raj Bahadur Trivedi, General Manager, State Bank of India (SBI), and the moderator Mr. Maulik Shah, Co-founder & CEO, Almus Risk Consulting, participated in the discussion.
The panel focused on the Indian diamond and jewellery industry’s current state and future prospects. The bankers and industry leaders agreed that the gem and jewellery industry has faced challenges before and will recover in the next 1-2 years. They also discussed opportunities in new markets and within different segments of the industry.
Key Takeaways from the Panel discussion:
- Industry veterans acknowledge a recent downturn but emphasize the industry’s resilience, citing its long history.
- Banks remains positive and focuses on individual company assessments rather than a negative view.
- The industry is cyclical, and every business experiences challenges. There’s a need to adapt to overcome difficulties.
- While the overall industry is down, specific segments like small diamonds have performed well.
- Speakers believe the current difficulties are nearing an end, with a potential for improvement in the next 1-2 years. However, challenges remain.
- The resilience of the industry is evident in how it has handled factors like COVID-19, price corrections, and self-discipline.
- Banks are not currently seeing a need for stricter lending practices, as companies have already adjusted their limits and payments are timely. This could change if the downturn extends.
- China’s market is a concern, but there are signs of stabilization in Hong Kong. The US market is cautiously optimistic about Christmas sales.
In the Q&A session that followed, it came to light that the Export Credit Guarantee Corporation of India Limited (ECGC) is considering GJEPC’s request of enhancing the credit guarantee limit for bankers beyond Rs. 100 crore cap.
The session concluded with a summing up by Mr. Shaunak Parikh, who reiterated the Council’s commitment to maintaining open channels of communication, promoting transparency, and forging stronger ties between the gem and jewellery industry and the banking sector.
The gem and jewellery industry is on the path to recovery, with various initiatives underway to drive demand and foster growth. Global stakeholders across the supply chain are making concerted efforts to boost jewellery as a product category, and India, as a key player in the mid-stream segment, is at the forefront of these efforts. GJEPC is Collaborating with De Beers and the Natural Diamond Council for the generic promotion of diamonds and diamond jewellery, along with partnerships with the World Gold Council to promote gold jewellery. A large consumer campaign, supported by GJEPC, is also underway to strengthen demand for diamond jewellery.
Vipul Shah concluded his speech by saying that the industry is expected to recover by the first quarter of 2025-26, with a rebound in demand in China as the government rolls out fiscal stimulus measures. Additionally, the planned expansion of over 3,000 jewellery retail stores across India in the next three years will significantly boost domestic demand.
