The mix of partial and complete lockdowns in different states led to limitations on workforce capacities and related manufacturing activities
India's gems and jewellery exports in May 2021 declined by 5 per cent to ₹21,188 crore (USD 2.89 billion) compared to the same month in pre-pandemic 2019, due to the disruptions caused by the second Covid wave across the country, according to the Gem and Jewellery Export Promotion Council (GJEPC).
In 2019, the overall gem and jewellery exports in May stood at ₹22,388 crore (USD 3.20 billion), according to the GJEPC data. India's gem and jewellery exports in May 2021 slipped into negative territory due to the severe disruption in manufacturing activity caused by the outbreak of the second Covid wave across the country, the GJEPC said in a statement.
The mix of partial and complete lockdowns in different states led to limitations on workforce capacities and related manufacturing activities, it added. However, gems and jewellery exports grew by 4 per cent during April and May 2021 to ₹46,414.38 crore (USD 6.31 billion) compared to the same months during the pre-pandemic year in 2019.
India's April-May 2021 export growth was driven mainly by the Domestic Tariff Area (DTA), which witnessed a 15 per cent growth in exports compared with the 31 per cent decline in exports recorded from Special Economic Zones (SEZs), it added.
"The revival of exports has happened due to the opening of international markets, resurgent demand and strong unstinted support from the government on various issues. Some of the announcements include the reduction in import duties on various rough gem and jewellery that is gold bars, silver bars, palladium, gold and silver findings among others, the revamped Gold Monetisation Scheme and extension of Interest Equalisation Scheme (IES) for Pre and Post shipment Rupee Export Credit for three months," GJEPC Chairman Colin Shah said in a statement.
Cut and polished diamond (CPD) exports witnessed an increase of 27 per cent to ₹31,229 crore (USD 4.26 billion) in April-May, 2021 compared to ₹24,514 crore (USD 3.5 billion) in April-May 2019, as manufacturers kept pace with strong retail demand in key export markets like the US, China, and Europe, despite operating with limited labour and pandemic restrictions.
Plain gold jewellery exports suffered from a lack of sales to tourists in major destinations such as Singapore, Malaysia, and Dubai where some pandemic-related travel restrictions are still in place. In addition, the second Covid wave and subsequent lockdowns triggered yet another exodus of goldsmiths and artisans, who fled to their hometowns, the GJEPC said adding that as a result, Indian plain gold jewellery exports April-May 2021 dipped by 69 per cent to ₹3,211 crore (USD 434.11 million) from ₹10,404.50 crore (USD 1.49 billion) in April-May, 2019.
By contrast, studded gold jewellery witnessed a growth of 49 per cent in April-May 2021 to ₹3,985.46 crore (USD 730.04 million) from ₹1,108.61 crore (USD 516.81 million) in April – May, 2019, owing to the reviving retail demand in key export markets like the USA, Hong Kong among others.
The clear shift in consumer preferences towards silver jewellery post-pandemic led to India's silver jewellery exports more than tripling in the April-May 2021, rising 259.50 per cent to ₹3,985.46 crore (USD 539.09 million) from ₹1,108.61 crore (USD 158.79 million) in April-May 2019.
A drop in export orders and non-availability of rough coloured gemstones from major key sourcing partners like Brazil and Africa due to the restriction of activities amid Covid-19 led to a 31 per cent decline in Indian coloured gemstone exports during April-May 2021 to ₹280.22 crore (USD 37.90 million) as against ₹425.51 crore (USD 60.96 million) in April-May, 2019.
“We are hopeful that with the support provided by the government and GJEPC's continued efforts by way of organising various trade shows and resolving day-to-day challenges of trade members, exports would bounce back in the coming months. Further, GJEPC is organising one of its key trade shows in August in Dubai, which would enhance morale of the Indian manufactures and traders and boost their export business," Shah added.