Indian banks have increased lending to the gem and jewelry industry, helping stem the impact of the Covid-19 pandemic, the country’s major trade organization said this week.

Indian banks have increased lending to the gem and jewelry industry, helping stem the impact of the Covid-19 pandemic, the country’s major trade organization said this week.

Credit released to the industry jumped to INR 627 billion ($8.44 billion) in March 2021 from INR 546 billion ($7.35 billion) in July 2020, according to the Gem & Jewellery Export Promotion Council (GJEPC).

Pragmatic decisions taken by the industry during the coronavirus outbreak have helped improve its credit profile, enabling banks to offer more credit at a time of critical need, the council observed Tuesday.

India’s leading diamond-trade organizations called on members to stop importing rough diamonds during the second quarter of 2021 to prevent an oversupply. As a result, rough imports fell to $1 million in April 2020 from $1.5 billion in February 2020, when the health crisis had not yet been declared a pandemic.

“This voluntary move on [the] part of the importers helped the trade recover from the Covid-19 crisis by avoiding a free flow of rough entering the manufacturing pipeline, thereby aiding the trade to optimize their debt levels,” said GJEPC chairman Colin Shah.

India’s gem and jewelry sector recorded exports of $3.42 billion in March, an increase of 36% from September last year.

Demand from the US and China accounted for around 75% of India’s polished-diamond exports in the six months ending March 2021, according to the GJEPC. 

Image: Indian rupee bills. (Shutterstock)