The trade group that supports India’s domestic jewelry industry has asked the government and the central bank for urgent help amid the “major financial stress” resulting from the Covid-19 crisis.

Companies in the sector have been forced to close and have lost out on revenue during the country’s latest coronavirus wave, the All India Gem and Jewellery Domestic Council (GJC) stressed last week in a letter to Finance Minister Nirmala Sitharaman and the Reserve Bank of India (RBI).

While exporters have been allowed to continue operations, jewelry manufacturers, wholesalers and retailers that supply the Indian market are considered nonessential and have had to shut, the council explained. Many of them used credit to obtain merchandise for the festive and wedding season, only to find that lockdowns wiped out sales, it added.

“The gem and jewelry industry was just about beginning to recover from the Covid-19 pandemic [that] afflicted the country last year when the country was devastated by the second wave of the pandemic,” wrote chairman Ashish Pethe and vice chairman Saiyam Mehra.

“The next few months will be difficult for the industry” despite some states reopening gradually, the executives added. “This has created a major financial stress in the industry.”

The organization called for banks to give gem and jewelry companies an extra six months to repay interest, and requested an emergency government loan to help struggling businesses. It also said small businesses in the sector should have their credit facilities restructured without suffering a ratings downgrade.

Other demands included a one-off grant to jewelers to cover their costs, as well as an extension to the gold metal loans they receive — a mechanism under which manufacturers borrow gold for the jewelry they make.

Image: Gold necklaces on display at a jewelry shop in New Delhi, India, in November 2020. (Shutterstock)