The fourth edition of the gem and jewellery industry’s annual banking summit, organised by the Gem & Jewellery Export Promotion Council (GJEPC), took place in Mumbai on July 31. The focus of this year’s event was the urgent need to provide institutional finance to the micro, small and medium enterprises (MSMEs) that make up 80 percent of the firms in the sector.
The Indian gem and jewellery industry as a whole has been suffering from a sharp reduction in bank finance that has followed the globally reported financial defaults by key diamond industry stakeholders as well as number of defaults in the jewellery sector.
The GJEPC’s noted that given the high value and export-driven orientation of the industry, the role of banks and the government-owned Export Credit Guarantee Corporation (ECGC) is paramount. The ECGC provides export credit insurance to Indian exporters.
Government participation in the event was headlined by Economic Advisor to the Minister of Commerce & Industry Rupa Dutta. Also participating were State Bank of India Deputy Managing Director P.N. Prasad, who is also the Chair of the Coordination Committee (CoC) set up to bring industry, financial institutions and government together on a single platform to tackle the problem of finance. Indian Banks Association Chief Executive V.G. Kannan also took part, as did a number of industry-related bankers.
The presence of De Beers Chief Financial Officer Nimish Patel and ALROSA United Selling Organisation Evgeny Agureev at the event underlined the importance of the issue of finance for the industry. The drying up of credit for Indian cutting and polishing units has adversely impacted rough diamond sales for all the diamond mining majors.
While no concrete steps emerged from the event, it is seen as a work in progress by the industry, government and the financial institutions as they grapple with the various issues. The banking sector wants greater transparency and accountability from the industry, while the industry points to the fact that they have taken major steps in this direction with initiatives like the MyKYC bank and seek greater participation from the financial institutions.