RAPAPORT… Indian banks have agreed to offer special concessions to diamond exporters to help them deal with late payments resulting from the coronavirus outbreak.
Companies will have extra months to repay loans they take to fund overseas shipments, the Gem & Jewellery Export Promotion Council (GJEPC) said in a note to members on March 13.
Exporters’ ability to recover payments from customers has suffered significantly in the past two months because of the coronavirus outbreak, as China and Hong Kong account for about a third of orders. Polished-diamond shipments to all markets slumped 41% to $1.38 billion in February, according to data from the GJEPC. Last month, the organization asked the government and banks for leniency due to the slowdown and its impact on cash flow.
The pandemic has started to affect the domestic market, too, with the Bharat Diamond Bourse in Mumbai asking member companies to reduce their staff head count by 50%, starting Wednesday. However, the Surat Diamond Association decided on Tuesday to keep the polishing industry open while implementing health precautions.
Image: Diamond manufacturing. (Shutterstock)
Indian Exporters Get Reprieve from Banks
The Bottom Line
- Indian banks will extend loan repayment periods for diamond exporters to ease cash flow pressures caused by delayed payments.
- Polished-diamond exports fell 41% to $1.38 billion in February, with China and Hong Kong, key markets, severely impacted.
- Domestic operations are affected, with the Bharat Diamond Bourse reducing staff by 50%, while Surat Diamond Association keeps polishing open with health measures.
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