New Delhi: Economic slowdown and a declining demand for gems and jewellery in countries like the US, Europe and Japan will hit the industry’s exports, the review of the economy for the year 2008-09 said.
The report said that a major concern for exports is the slowdown in the Organisation for Economic Co-operation and Development (OECD) countries which is turning into recession with growth estimates of the US, EU and Japan being revised downwards virtually every month since September 2008.
“This will have a negative effect on imports of these countries and consequently on exports of emerging economies,” it said.
Infact, Christmas orders from the US and Europe have gone down by 15 to 25% according to countries’ industry leaders.
Although the declining trend begun well before the Christmas season, the last eight months has witnessed lower orders with more cancellations.
The manufacturing segment saw exports of cut and polished diamonds dip by 20.18% as against the the same period last year.
The country’s gems and jewellery exports stood at $20.88 billion for 2007-08, a growth of 22.27% over $17.08 billion the previous year.
Also, India’s total exports declined by about 10% in November, on a negative trail for the second month in a row this year, following the US and European markets recession .
Several developed markets including the US, the UK, Japan and other countries in the Eurozone, which are India’s major export destinations, are officially in recession.
The government and the Reserve Bank of India have taken several steps, including making available cheap credit to exporters, to boost the sector.