India’s diamond industry has asked banks and the government for help with its credit difficulties, as the coronavirus crisis has left clients in China and Hong Kong unable to pay bills.
The Gem and Jewellery Export Promotion Council (GJEPC) wrote to 30 lenders and the commerce and finance ministries Tuesday 11, requesting more time to pay back loans and finalize other costs connected with overseas shipments. Around 35% to 40% of India’s gem and jewelry exports are to mainland China and Hong Kong, according to the letter.
“The business has been facing severe hurdles, with [financial] commitments not being fulfilled [for] exports,” the letter said, citing the lack of interactions with China. “The trade foresees [a] major imbalance in payments for the [companies that deal] with various merchants in this part of the world.”
The outbreak of the virus, mainly in China, has led to a significant slowdown in the region’s retail sector and has caused businesses to close temporarily. Jewelry chain Chow Tai Fook is shutting more than 40 points of sale in Hong Kong and Macau until further notice and reducing the opening hours at its other branches, it said Tuesday 11.
The latest challenges pile further pressure on the industry after protests in Hong Kong during the second half of 2019 led to a slowdown in India’s trade with the municipality. India’s polished exports fell 16% to $20.62 billion last year, according to data from the GJEPC.