GJEPC Hosts Interactive Session, Strengthens Ties with Bankers Who Express Optimism for Industry Growth
19th October 2024
GJEPC hosted an interactive session in Mumbai on October 17th, bringing together over 75 participants, including industry leaders and bankers, to discuss the current state of the gem and jewellery sector and strengthen ties with financial institutions. Led by GJEPC Chairman Vipul Shah, the event addressed challenges such as declining demand in key markets and financial constraints. Key discussions focused on the resilience of the industry, the role of banking partnerships, and future growth opportunities, particularly in emerging markets. A panel of industry experts and bankers expressed optimism for the sector’s recovery within the next 1-2 years, emphasizing collaboration and innovation as key drivers for future success
Opening Address by Mr. Vipul Shah
The well-attended session with over 75 participants began with an opening address by Mr. Vipul Shah, who set the tone for the event by highlighting the importance of strong banking partnerships for the growth of the gem and jewellery sector.
Emphasising Strong Industry-Banking Partnerships
Mr. Vipul Shah said that continued support from banking partners will be even more critical during these challenging times. He added that this meeting is focused on strengthening the industry’s collaboration with banking partners, addressing mutual concerns, and tackling the financial challenges that are hindering our sector’s growth. He noted that together both sides can explore solutions that will benefit both the industry and financial institutions, ensuring a stable and prosperous future for all.
Industry Challenges and Opportunities Highlighted by Mr. Vipul Shah
In his keynote address, Mr. Vipul Shah offered a granular perspective of the industry’s current situation. He spoke about the challenges the industry is facing, particularly the decline in demand in key markets like the USA and China, as well as the geopolitical concerns affecting trade. Despite these obstacles, he highlighted the resilience of the Indian gem and jewellery industry and the growth opportunities in the Middle East, supported by the India-UAE CEPA agreement.
GJEPC’s Advocacy for Financial Support
GJEPC has urged the Government to reconsider the Rs. 50 lakh cap on the Interest Equalization Scheme for MSMEs, as it falls short of addressing the financial needs of the gem and jewellery sector, which operates with high-value, low-margin exports and extended working capital cycles. To support the industry effectively, GJEPC has requested an extension of the scheme’s benefits for two more years, until March 2026, to help businesses plan more predictably during these challenging times.
Diamond Industry Outlook by Mr. Pranay Narvekar
Industry analyst Mr. Pranay Narvekar, Partner, Pharos Beam Consulting LLP, provided a comprehensive overview of the diamond industry outlook, highlighting potential opportunities and challenges and the role of banking in supporting its growth. Mr. Narvekar said that despite recent challenges, the gem and jewellery industry is expected to stabilise.
A Banker’s Perspective from Mr. Niraj Shah
In his address, Mr. Niraj Shah, Country Head of Corporate and Institutional Banking, IndusInd Bank, shared a banker’s perspective on the gem and jewellery sector. He stated that the future of the gem and jewellery industry is bright, but it requires a collaborative approach and a focus on innovation, sustainability, and ethical practices.
Panel Discussion on Industry and Banking Collaboration
A panel discussion featuring industry representatives and bankers followed, providing a platform for open dialogue and exchange of ideas. Mr. Russell Mehta, Mr. Ashish Mehta, Mr. Niraj Shah, Mr. Raj Bahadur Trivedi, and moderator Mr. Maulik Shah participated in the discussion.
Key Takeaways from the Panel Discussion:
- Industry veterans acknowledge a recent downturn but emphasize the industry’s resilience, citing its long history.
- Banks remain positive and focus on individual company assessments rather than a negative view.
- The industry is cyclical, and every business experiences challenges.
- While the overall industry is down, specific segments like small diamonds have performed well.
- Speakers believe the current difficulties are nearing an end, with potential for improvement in the next 1-2 years.
Q&A Session and ECGC Credit Guarantee Limit
In the Q&A session that followed, it came to light that the Export Credit Guarantee Corporation of India Limited (ECGC) is considering GJEPC’s request of enhancing the credit guarantee limit for bankers beyond Rs. 100 crore cap for individual accounts.
Conclusion by Mr. Saunak Parikh
The session concluded with a summing up by Mr. Saunak Parikh, who reiterated the Council’s commitment to maintaining open channels of communication, promoting transparency, and forging stronger ties between the gem and jewellery industry and the banking sector.
Path to Recovery and Future Initiatives
The gem and jewellery industry is on the path to recovery, with various initiatives underway to drive demand and foster growth. GJEPC is collaborating with De Beers, the Natural Diamond Council, and the World Gold Council for the promotion of diamond and gold jewellery.
Anticipated Industry Recovery by 2025-26
Vipul Shah concluded his speech by saying that the industry is expected to recover by the first quarter of 2025-26, with a rebound in demand in China as the government rolls out fiscal stimulus measures.
About The Gem and Jewellery Export Promotion Council (GJEPC):
The Gem & Jewellery Export Promotion Council (GJEPC), set up by the Ministry of Commerce, Government of India (GoI) in 1966, is the apex body of the gems & jewellery industry. GJEPC has over 10,000 members and operates with regional offices across key industry centres.
