BackCoronavirus: Gems and jewellery export to Hong Kong, China may fall 70% in March
In financial year 2019, the two markets together were the number one export destinationIndia’s export of gems and jewellery was estimated at $39.75 billion in FY2019
PremiumNEW DELHI: Covid-19 is taking a toll on India’s gems and jewellery exports as shipments to Hong Kong and China are likely to fall 70% year-on-year in March.
The Gem and Jewellery Export Promotion Council (GJEPC) on Thursday said a partial closure at factories that buy gems and jewellery from India’s traders “will further produce a loss of $1073 million in the coming months till April 2020 in lieu of reduced exports to the said countries".
This is in addition to the loss of $171.5 million already accounted for after the outbreak of Covid-19 in December, GJEPC said.
In the financial year 2019, the two markets together were the number one export destination for India’s gems and jewellery trade.
An outbreak of the epidemic in China resulted in disruption of manufacturing and trading activities in the country and has adversely affected India’s exports to the two markets.
This is likely to exacerbate, GJEPC said. According to its estimates, by April, exports could further decline by 95% year-on-year. “Since, manufacturing activities in China and trading activities in Hong Kong are highly disrupted and almost closed, therefore, it is estimated that exports to both the countries may decline by 70% in the month of March 2020 and 95% in April 2020," the note added.
Hong Kong and China are significant export partners for various gem and jewellery products out of India such as cut and polished diamonds. India’s exports of such goods to both the markets are estimated at $11.28 billion or roughly 28.38% share of India’s total export trade of gem and jewellery.
India’s export of gems and jewellery was estimated at $39.75 billion in FY2019. Around 40% of the total exports of diamonds amounting $9553 million are exported only to Hong Kong and China. Additionally, 55.22% of the polished Indian diamonds, 41.24% of the silver jewellery, and 48.96% of coloured gemstones from India are exported to these two countries, making the two markets significant trade partners for Indian exporters.
The news is especially worrisome for traders in markets such as Surat--the biggest processing hub for diamonds in the world.
The Coronavirus outbreak, first detected in China in December, has rapidly spread to several countries across the globe. In the process, it has disrupted supplies out of China that is a large manufacturing hub for industries spanning auto components, electronics, apparel, leather goods, bulk drugs, and gems. India’s exports of gems and jewellery to Hong Kong and China declined by around 16% year-on-year to $1428 million between December 2019 and February 2020 as compared to $1693 million during the same period last year, the note said.
The GJEPC had said in February, India’s exports of gems and jewellery products to both the markets combined fell 45% year-on-year compared to a decline of 21.5% in January 2020.
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