The Gems and jewellery export is likely to suffer yet another blow in December 2008 after a 34% decline to $987 million in November 2008.The reduction in overseas demand has forced the industry to cut production and lay off workers. In a desperate move, the Gem & Jewellery Export Promotion Council (GJEPC) has demanded immediate interim relief to prevent the imminent crisis and loss of over 25-30 per cent of its labour force due to recession enforced layoffs. It wanted banks to provide capital at lower cost which will help them generate fresh orders by diversifying into different markets.  

Vasant Mehta, Chairman, Gem & Jewellery Export Promotion Council (GJEPC) requested for raising the rupee interest rate subvention from 2% to 4% , extending the same facility to dollar credit where interest rate is fixed at 400-500 basis points above the London Inter-bank Offered Rate (Libor), RBI to make available adequate dollar lines and banks should be asked to continue giving credit limits sanctioned to each individual exporter on absolute dollar terms rather than on fluctuating exchange rate The current practise of declaring an exporter's account as NPA (non-performing asset) due to delayed collections and thereby bringing the rating down should be discontinued. Finally, it also wanted the grant of duty credit scrip equivalent to 2.5 per cent of FOB value of previous year exports to all countries.  

Vasant Mehta said on Tuesday that lower cost of capital and increased time limits will help the industry generate fresh orders by diversifying into different markets. The industry has posted a 20% reduction in orders for the period April-October 2008, mainly due to a fall in demand from the US which accounts for 30-35% of total gems and jewellery exports.